An ongoing lackluster economic outlook remains intact for Northern Europe, according to the most recent edition of the “Global Port Tracker: North Europe Trade Outlook” by maritime consultancy Hackett Associates and the Institute of Shipping Economics and Logistics.
Ports surveyed in North Europe Global Port Tracker report include the six major container reports in North Europe: le Havre, Antwerp, Zeebrugge, Rotterdam, Bremen/Bremerhaven, and Hamburg.
The report explained that its model comprised of economic fundamental indicators cite a lack of growth, coupled with a subsequent further decline in economic activity, which translates into more trade volume reductions.
Over the next six months, the report is calling for a 4.1 percent decline in total moves across the North Range, which stands as an improvement compared to the 5.2 percent decline for the same period a year ago. And loaded incoming containers are pegged to fall 4.5 percent for the same period compared to the previous six months, with volumes down 6 percent for the first six months of 2015.
European-bound imports are projected to fall 3.2 percent, while Northern Europe imports could decline by at least 4 percent, and the six North Range ports are expected to see incoming volumes fall 4.4 percent, with outgoing volumes to fall 3.1 percent, and total handled volumes predicted to tail off by 2.3 percent.
Hackett Associates Founder Ben Hackett commented in the report that these numbers indicate that any type of meaningful improvement in trade volumes is not expected in the first half of 2016, explaining that he is seeing “a worsening economic situation that will drive container volumes down further in all major trades.”
Compounding this situation, he noted, is how container carrying capacity continues to head up, or “in leaps and bounds without much reference to trade in the foolish search for economies of scale.”
This was made clear by his explaining that going back to 2011 capacity has grown by more than 6 percent annually, with 2015 topping 8 percent, which he labeled disastrous.
In a previous report, Hackett observed that as the number of containers for transport declines, shipping lines are still “ignoring the repeated lessons of the past…[and] in the face of declining demand, supply should be cut.”
This, in turn, leads to a situation where there is little capacity in layup, with new and bigger ships entering the market, he wrote, and results in what he called a market share battle, with freight rates declining.