Global Port Tracker report calls for more slow growth
February 28, 2012
As was the case in its previous edition, the Global Port Tracker Report from Hackett Associates and the Bremen Institute of Shipping Economics and Logistics, is calling for continued worsening of economic conditions in Europe.
Ports surveyed in this report include the six major container reports in North Europe: le Havre, Antwerp, Zeebrugge, Rotterdam, Bremen/Bremerhaven, and Hamburg.
The report stated that total European 2011 import growth did not exceed 4.8 percent, with North Europe at 4.1 percent. It added that Northern Europe-bound imports fell by roughly 7 percent during the fourth quarter of 2011 and are expected to drop by more than that during the first quarter of 2012.
Ben Hackett, president of Hackett Associates, noted in the report that “austerity and trade do not mix as 212 is not shaping up to be a good year, or at least the first half is not.” The report added that the combination of austerity and the fiscal pressure of the Euro on the economically weaker countries has dragged the Eurozone back into a relatively mild recession.
For the six ports surveyed in Global Port Tracker, the report expects imports are expected to increase by about 3 percent to 16.5 million TEU (Twenty-foot Equivalent Units) and exports are expected to hit 17.8 million TEU, which would represent a 5 percent increase.
And in the next six months, the report noted that increases in imports are expected in four of the next six months, with export gains expected in three of the next six months. The report explained that all import and export changes are expected to be in the single digit range.
In a recent interview with LM, Hackett said that the prospect of no growth in 2012 is not surprising, as all the countries that are taking austerity measures are seeing negative economic growth.
“The European governments have pushed so hard on austerity measures that in most countries it is raising unemployment and reducing GDP growth as a result,” he said. “Most GDPs went negative during the fourth quarter of 2011 if not all of them. The first quarter of 2012 is likely to be the same or even worse than the fourth quarter was.”
And issues related to the sovereign debt crisis, especially in Greece, has dried up the amount of credit available in Northern Europe very quickly, as Hackett explained banks are simply not lending and putting reserves away, because they don’t want to lose 70 percent of their loans to Greece and possibly to Portugal.
And between consumers being squeezed by rising unemployment, rising taxes, and tight credit, Hackett noted these factors make it difficult to see any trade growth.
“Because of this, there is still a lot of capacity available on the Asia-Europe trade lane, and the reduction in capacity has not been anywhere near what it has been on the Trans-Pacific,” said Hackett. “This will put pressure on freight rates. It is a case where capacity is not going down quickly enough, and demand is dropping more rapidly, which creates a situation where there really is overcapacity. Even if we see some growth in the second half of 2012, it is not going to be enough to show an annual growth rate.”
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