Page 49: of Maritime Reporter Magazine (June 1998)

World Container Port Traffic By Region ('000 TEU full, loaded and empty) 1980 1985 1990 1995 1996 1997(p) 1998(f)

N. America 9,531 12,772 16,659 22,155 22,957 24,485 25,763

L America 2,349 3,510 4,948 9,382 10,358 11,512 12,605

W. Europe 11,728 16,292 22,419 31,711 34,659 38,575 41,501

E. Europe 373 548 605 733 807 933 1,070

Far East 7,662 13,057 22,959 41,287 44,571 47,839 49,239

SEAsia 1,860 3,434 9,611 20,814 23,258 25,460 25,560

S. Asia 249 892 1,768 3,206 3,805 4,311 4,725

Mid East 1,943 2,849 3,548 6,772 7,392 8,004 8,758

Oceania 1,610 1,990 2,333 3,397 3,592 3,794 3,974

Africa 1,454 1,954 2,668 4,666 5,075 5,109 5,320

Total 38,758 57,299 87,518 144,122 156,474 170,023 178,515 p = preliminary; f = forecast Source: Drewry Shipping Consultants Ltd. contract. The reefer shipping industry knows this basic fact above all others.

When demand is high and ships are full, rates must go up to com- pensate for both the costs of oper- ating that capacity in slack periods and the rate dilution which inevitably occurs at that period. A much greater degree of seasonal pricing is clearly indicated in trades with major fluctuations in cargo volumes, and already the transpacific carriers have announced the introduction of a "temporary peak season sur- charge." Other trades will need to follow suit.

Such a strategy will be reinforced by the current space shortages, which emphasize the message of opportunism and flexibility in rate making. Contracts made to secure cargo at low rates do not look so smart when demand rises - and when what was already effectively a discount for stable, guaranteed service becomes even further below the prevailing market rate.

And carriers do seem to be react- ing positively to the opportunities presented by the surge in Asian exports. Far East-Europe rates rose by $200 per FEU in January (and stuck) and are scheduled to go up by a further $300/FEU in July.

If the Asian export boom contin- ues, carriers might well contem- plate a third price increase within the year.

Transpacific eastbound rates rose by $300/FEU in May and unlike many other such increases these appear to have been widely accepted.

With container freight rates in clear long term decline, such opportunities to secure much need- ed windfall gains need to be exploited to the maximum that the market will allow - because the supply/demand balance is not going to stay in carriers' favor per- manently.

Despite the major problems which emerged in the Far East during 1997, both regional and global container traffic growth remained surprisingly firm, with 3470 Martmsbuig Pike, EO. Box 98

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