Report: Strong euro, weak dollar helped container trade
The rise of the euro against the dollar in the fourth quarter of 2006 played a role in strengthening the container shipping market, said an annual review of the business published by the Paris shipbroker Barry Rogliano Salles and information service AXS Marine.
In their annual review of the container shipping market they highlight the 'euro-dollar parity impact' saying 'it has helped to maintain ships close to full, especially on east-west routes.'
'The stronger the euro is against the dollar, the longer the distance run by the average east-west container is,' the report says. 'With a strong euro, Chinese and other exports tend to proceed to Europe instead of the U.S.'
The dollar's relative weakness and lower U.S. economic expectations 'kept a lid' on Far East-U.S. trade and moderated growth, the report.
Using figures weighed for the number of loops, the review said: 'it necessitates on average eight ships' for a typical Far East/Europe loop instead of roughly an average of six ships per loop for the Far East/U.S. West Coast or Far East/U.S. East Coast trade.
This 'helped maintain capacity demand at a good level as the euro went stronger against the dollar during the last months of 2006,' the report said.