No end in sight

CTS figures for January 2017 do not suggest that trend is going to reverse any time soon. Southbound volumes for the month were down by 18% year-on-year, which has lowered our rolling 12-month average to 95,600 teu/per month, down by 12.5% Y/Y.

With no immediate expectation of a demand recovery, carriers are trying to restrict the amount of capacity available through missed/void sailings, although the cascade of bigger ships from other trades continues to undermine the effectiveness of that practise. Forward schedules for April indicate that southbound slots will be virtually identical to those in the same month last year.

Despite the weak demand picture spot rates along this route made a surprising upturn at the end of last year although some of the momentum dissipated in February. We estimate that average Asia to West Africa rates fell by around 12% month-on-month in February to reside at approximately $1,600 per 40ft container. With ships barely half-full on the southbound voyage it does not seem likely that carriers will be able to arrest the decline in the next few months.