Excess capacity! Weak demand for European and American goods

Since last year, global central banks have entered a cycle of interest rate hikes, and high interest rates have caused a rapid reversal of the economy, leading to a downturn in the container shipping industry, which had a strong demand during the epidemic. Not only have flights been cancelled, but multiple ships have also been stranded in ports because they need to spend more time gathering goods and wait for better returns.

According to CNBC, this summer has been quite painful for routes from Asia to Europe and even other regions, and hopes for the third quarter of the traditional peak season are gradually fading. Data shows that 13 voyages have been cancelled or delayed since July, and it will be difficult to alleviate them in the coming months.



At the same time, the demand of major economies in Europe and America is weak, and the volume of goods is not improving for a long time.

Taking the recent July US cargo volume data as an example, according to the data, the total import volume of US sea freight decreased by 12% year-on-year, a decrease of 10% compared to 2021, and a decrease of 1% compared to the same period in 2019 in normal years. The degree of impact varies in different regions.

The East Asian region is the main source of imports to the United States, with a significant decrease of 15% year-on-year in goods volume. This is mainly because China holds the largest proportion among East Asian countries, while China's sea freight volume is decreasing. Even compared to 2019, the volume of goods in East Asia has decreased by 9%.

The second ranked Southeast Asian region has been affected by the US destocking, with a year-on-year decrease of 4%, but the decline is far below the overall market level. The difference is that compared to the same period in 2019, it increased by 31%, once again proving that Southeast Asia has become the largest beneficiary of the US market in the past four years.

Although the Western European region ranks third, its cargo volume has decreased by 8% year-on-year, becoming a decreasing trend year by year, and may soon be surpassed by the fourth ranked South Asian region. This is mainly due to the high production costs in Western Europe, which makes it difficult to maintain at a high level.

On the contrary, due to geopolitical reasons, South Asia has become the second largest beneficiary region after Southeast Asia, benefiting from the United States' "de risk" policy. Although the volume of goods decreased by 12% year-on-year, it increased by 23% compared to the same period in 2019.