THE Eastbound Management Agreement (EMA) governing trade from Europe to Asia will implement a rate restoration of US$150 per 20-foot container and $225 per 40-foot container with effect from January 1. Cargo traffic to Hong Kong and other parts of Asia from Europe has shown an increase of more than 20 per cent. Eastbound vessels have continued to be fully loaded, and there are cases in which carriers find themselves unable to accept cargo. The scheduled rate restoration is intended not only to cope with this steep rise in cargo traffic, but also to improve the profitability of the eastbound trade, with freight rates remaining at a below-cost level. Since the turn of the year, eastbound cargo on the European route has been on a sharp upswing. In particular, Japanese lumber importers, now suffering from a drop in imports from the tropical areas and the United States because of a drive for environmental protection, are rapidly boosting purchases from northern Europe. This is giving added impetus to the growth of eastbound cargo traffic. Also, the strong yen against the European currencies is contributing to the growth of cargo from Europe to Japan. The eastbound cargo from Europe to Asia, hauled by both conference and non-conference lines, amounted to 1.94 million TEUs in 1992, up 16.6 per cent from the 1.67 million TEUs in the previous year. A further rise of 14.2 per cent to 2.22 million TEUs is expected for 1993. In the first seven months of this year, the conference lines transported 419,000 TEUs of eastbound cargo, scoring a substantial gain of 20.7 per cent from the 347,000 TEUs in the corresponding period of the previous year. In spite of a rise of more than 20 per cent in cargo volume, shipping capacity available on the European route this year showed an increase of only eight per cent. As a consequence, eastbound vessels have continued to be fully loaded since early this year. According to shipping sources concerned, there are cases when cargo is not accepted. Meanwhile, eastbound freight rates have declined by about 20 per cent compared with the level of 10 years ago, according to the EMA. Moreover, the EMA says, if price increases are taken into account, the pace of freight rate falls works out at 40 per cent-plus.
