The combined head-haul and regional trade volumes fell 1.5 percent MoM in July but were up 1.5 percent YoY, according to the latest update from BIMCO.

"While this initially seems to be a relative improvement in volumes, compared to first half results, the figure appears in a different light when historical seasonality is considered."

Container volumes in head-haul and regional trades are the key drivers of container vessel demand, average container rates, liner operator profits, and, since 2020, port congestion, the update said. "According to Container Trade Statistics, combined head-haul and regional trade volumes fell 0.4 percent YoY in the first half of 2022. Head-haul volumes were 1.3 percent lower than a year ago while regional volumes were 0.6 percent higher. Under normal market circumstances, the peak season in key head-haul trades should lift Q3 volumes. However, recently released volume statistics indicate that there may be no peak season in 2022 but it is very likely that volumes will slow in Q4."

In the Far East to North America trade lane, volumes in July have historically been on average 7 percent higher than June volumes due to the beginning of the peak season. However, this year volumes were 3.3 percent lower in July than in June. Applying historical seasonality, volumes should have been nearly 200,000 TEU and 10.6 percent higher than actual volumes.

"Using the same principle for all head-haul and regional trade lanes, the combined July volumes should under normal circumstances have been 3.3 percent higher; 4.3 percent higher in head-haul trades and 1.9 percent in regional trades. Overall, volumes would then have been 4.9 percent higher than July 2021 instead of 1.5 percent. This is partly because it was in 2021 in recent years that volumes in July were lower than in June."

Applying the same seasonality-based calculation to the rest of 2022, the full year volume estimate ends at 77.8 million TEU and 63.7 million TEU for head-haul and regional trades, respectively. In total, that would leave the combined volumes at 141.5 million TEU and 1.3 million TEU lower than in 2021 (a reduction of 0.9 percent). Head-haul volumes would be down 3.3 percent YoY while regional volumes would be up 2.3 percent percent YoY."

Niels Rasmussen, Chief Shipping Analyst, BIMCO says: "Considering the risk of energy shortages in Europe during winter and that conditions for consumers and businesses are likely to get worse before they get better as the year progresses, it is possible that volumes could end even lower.

"Though we appreciate that this approach to forecasting rest-of-year volumes may be somewhat simplistic, the overall forecast does tally with the economy-based forecasts in our recently published Container Market Overview and Outlook report. The prediction will most likely not end up 100 percent accurate but we do believe the overall trend will end up correct, confirming a very muted peak season in key head-haul trades and lower Q4 volumes in line with normal seasonality."

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