reports that Asia-Europe container trade has continued to rebound in April. 1.1 million teu (twenty-foot equivalent units) of box volume was shipped from Asia to Europe during the month, up substantially from 878,129 teu one year ago.

For the first quarter, volume was up 21%. Asia-Europe freight rates also rose in April from March with a price index hitting 122 from 116. (base year 2008 = 100)

European demand weakness didn't materialize in April. Still, transport research firm Transport Trackers (TT) finds 'it difficult to expect Europe to magically keep up a strong demand in the face of a massive need for austerity following a long period of Debt Gone Wild.' So perhaps weakness is on the way.

Interestingly, it has been Asian demand for European goods which weakened in April. Eastbound container traffic fell 7% in April year over year, despite having gone up by 23% year over year in the first quarter.

Given the weakening euro, this data seems counter intuitive, one would have expected European demand to be the first to drop. Perhaps May will bring good news for Asia-bound traffic, given that it was the month when the euro truly collapsed, as shown below.

Transport Trackers notes separately that Asia-Europe rates fell slightly (1.4%) in May vs. April, but note that this could be a ship-supply driven response. Previously idle ships (put into lay over during the recent downturn) have been pouring back onto the market.

TT:

Idle fleet down big time (1+m TEU): According to Alphaliner, the idle boxship fleet has fallen to 263 ships or 549,000 TEU of capacity, a 17‐month low, after 75 vessels or another 358,000 TEU of capacity has been re‐ activated in last few weeks. The reduction of almost 1m TEU of idle tonnage, since the peak of 1.52m TEU recorded in December 2009, was largely driven by the shortages in the 4,000+ TEU size ships, given also that many new services (with 4,000+TEU) were recently launched for summer peak season

Regardless, container trade activity continues to show reasonable strength, even along Asia-Europe. The threat now, as TT highlights above, is that idle capacity could come back to eagerly, and combine with an expected 9-10% 2010 fleet growth to create a new environment of overcapacity. Still, this remains to be seen, and for now the key take away is that we haven't seen significant European contagion yet via container trade data.