Container Shipping Outlook: The Asia-Europe Trade

Date Added: 12 April 2023

Container Shipping Outlook: The Asia-Europe Trade

Davies Turner offers a comprehensive network of international container shipping services, including LCL and FCL import and export services in the trade between many Asian countries and the UK, including our direct two-way rail service between China and the UK.

We note that the Journal of Commerce reports that uncertainty over space on the Asia-Europe trade in 2022 has given way to uncertainty about demand in 2023, with those involved in the European import markets divided over when an expected inventory recovery will occur.

The sooner the better, as the sustained weak demand is increasing pressure on European shippers to reduce working capital tied up in excess inventory.

The JoC says that the problem is that ocean schedule reliability on the Asia-Europe trade stood at just 52 percent in January, up significantly from the low levels of the past year, but still below a level where shippers would feel comfortable reducing buffer stocks.

Some forwarders and carriers believe a late second-half replenishment campaign by the retail sector is likely as the risk of a recession subsides, while others point to full warehouses subduing a return of demand until late this year or early 2024.

Still, adds the JoC, there are emerging signs that inventory levels are slowly receding. February PMI survey data by S&P Global, parent company of the JoC, found that pre-production inventories in Europe fell for the first time since September 2021 as companies stepped up efforts to unwind safety stock buffers.

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