The Q4 2018 World Liner Supply report shows cargo front-loading on Asia to North America trades and challenges associated with the EU’s underperformance.
World trade in the fourth quarter of 2018 encountered challenges from U.S.-China trade battles spurring supply chain volatility and the European Union beginning to struggle economically.
These headwinds inflicting the most prominent economic zones in the world can be measured on a quarterly basis using the Bluewater Reporting World Liner Supply Report (WLS).
Bluewater Reporting’s data-heavy WLS report tracks the estimated weekly allocated TEU capacity of competitive direct liner services on 30 individual lanes operating between Asia, Europe and North and South America.
The report estimates the allocated capacity within each specific trade lane and takes skipped sailings and slow steaming into account. It is designed to help ocean carriers, non-vessel-operating common carriers, freight forwarders, shippers, ports and analysts monitor trends in ocean liner shipping capacity.
BlueWater Reporting’s Q4 2018 WLS report illustrates that estimated weekly allocated TEUs on the Asia to East Coast North America trade rose 2.9 percent between the third and fourth quarters of 2018, from 143,297 TEUs to 147,509 TEUs. Meanwhile, estimated weekly allocated TEUs on the Asia to West Coast North America trade rose 3.7 percent between the third and fourth quarters of the year, from 294,701 TEUs to 305,474 TEUs, as illustrated in the chart below.
China and the United States dominate these trade lanes, and these volumes increases are a reflection of both countries experiencing economic growth in Q4 2018.
The Chinese were able to establish record trade surpluses on these lanes, which spurred growth in its export-based economy, while the United States readily bought East Asian goods to help drive its consumer-based economy.
Geopolitics impacted this trade lane, as exports from China to the United States were front-loaded in anticipation of increased tariffs coming in Q1 2019. If increased tariffs eventually have an impact on this trade lane, the data should be evident in the next WLS report.
The European Union experienced a slowdown in economic growth in Q4 2018, which negatively impacted its trade with Asia. Estimated weekly allocated TEUs from North Europe to Asia fell 3.2 percent between the third and fourth quarters of 2018, from 232,223 TEUs to 224,885 TEUs. Meanwhile, estimated weekly allocated TEUs from North Europe to North America inched up 0.3 percent between the third and fourth quarters of 2018, from 76,859 TEUS to 77,097 TEUs, as illustrated in the chart below.
The European Union is led economically by Germany, which experienced suboptimal growth in 2018. Germany depends on exports to drive economic growth, and during periods of underperformance, trade lanes from northern Europe struggle. The fourth quarter of 2018 faced many challenges with the European Union’s underperformance and the U.S.-China trade war.
Although these challenges may negatively impact data in the future, overall Q4 2018 was a good quarter for world trade with capacities increasing in most trade lanes.
The Q4 2018 WLS report is downloadable in an Excel spreadsheet form here. You must be a BlueWater Reporting individual subscriber or a BlueWater Reporting corporate subscriber to download the WLS report. Additionally, the report may be purchased directly for $500.
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