For years, American Shipper
affiliate ComPair Data
has allowed the industry to see which of the two major east/west trades are the biggest.
The rises and falls in capacity on the eastbound transpacific and westbound Asia/Europe trades are dramatic and intriguing simply due to the size and importance of those two lanes.
Less noticeable, but growing in importance, is the rise of Asia's connectedness with South America. It's an issue we've touched on before
and will likely do more in the future.
The latest World Liner Supply report from ComPair Data
gives us a chance to revisit the growing significance of this emerging lane. The report tracks, on a quarterly basis, how capacity moves on 12 trade lanes operating between Asia, Europe, North America and South America.
It's futile at this point to make a direct comparison between Asia/South America trade and that between Asia and North America or Europe. First, the Asia/South America trade is hardly one-seventh the size of the Asia/North America or Asia/Europe lanes.
Second, there's no dominant head-haul lane in the Asia/South America trade -- if anything, it's Asian demand for South American cargo that's higher than the other way around.
A more apt comparison is to look at how Asia's cargo relationship with South America measures up to North America's cargo relationship with South America. Here, we see Asia flexing its muscles.
Despite the geographic proximity between North and South America, there is almost identical weekly allocated capacity (54,000 TEUs) from North America to South America as from Asia to South America. Even more telling are the outbound capacity figures from South America.
At the end of June, there were roughly 41,000 TEUs of allocated capacity from South America to North America. But from South America to Asia, it was 65,000 TEUs (nearly 60 percent more). What's more, capacity from South America to Asia grew three times faster in the second quarter than it did from South America to North America.
And it's hard to argue that seasonal cargo patterns had much influence either. South American produce is in demand throughout the world.
The overarching trend is that trade between South America and Asia appears to be in its infancy, with huge potential for growth, while trade between South America and North America has probably reached a mature stage, with less scope for growth. We're at a point where the two trades look fairly similar in terms of allocated capacity.
But growth figures, both from ComPair Data's
capacity analysis and from the economies in these growing regions, suggest we could be at an inflection point on the path to Asia/South America becoming a third dominant east/west trade. ' Eric Johnson