[230211.EN.SEA] Intra-Asia Trade: A Double Edged Sword For Carriers (part 1)

THE Intra-Asia trade, despite being the largest trade in the world today, still seems to receive far less attention than the long-haul Asia-Europe and transpacific trades.  In fact there is still a sense of mystery surrounding the Intra-Asia trade, given the fact that many still disagree on such simple fundamental definitions of the trade such as its geographical boundaries, with some carriers and analysts including India and the Middle East as part of the trade.  For the purpose of our study we do not include that region as such.  To illustrate the difficult in understanding the Intra-Asia market we need only look at a recent study on the trade conducted by Alphaliner, which puts trade volumes for the region at 14 million TEU for 2010.  However, this is not an accurate representation the trade’s total business this year as this calculation is based on IADA (Intra-Asia Discussion Agreement) statistics, whose members only comprise 60 per cent of the trade in terms of capacity deployment.  According to one analyst that we spoke to, based on the IADA numbers, total trade volumes should be in excess of 23 million TEU. But even then, an answer as to the actual size of the market is not that simple, he added. "One must also take into account the fact that carrier management have a habit of being overly cautious when they submit their numbers to IADA, which is due to a number of reasons.  "But the result of this is that the IADA figures for trade volumes is likely under estimated,” he said.  One of the reasons for this, the analyst explained, is perhaps to avoid being accused or targeted by other members if they are perceived to have gained in market share.  As a result, liner management on the trade tend to discount their total volumes by roughly 10 to 20 per cent, he said.

Source “ CSM, 28.12.10.