Economic conditions still hindering European trade numbers, says Global Port Tracker report
May 30, 2013 - LM Editorial
The most recent edition of the Global Port Tracker report from Hackett Associates and the Bremen Institute of Shipping Economics and Logistics pointed out that ongoing difficult, but slowly improving, economic conditions continue to hinder international trade to Northern Europe.
Ports surveyed in this report include the six major container reports in North Europe: le Havre, Antwerp, Zeebrugge, Rotterdam, Bremen/Bremerhaven, and Hamburg.
According to the report, the import growth rate for the North Europe region is expected to decrease by 12.2 percent this year to 12.2 million TEU (Twenty-Foot Equivalent Units), with exports expected to grow by a very modest 0.7 percent.
The report is calling for 2013 total imports to Europe to be up 4.1 percent at 21.7 million TEU, with exports for the same period expected to be up 6.4 percent at 18.1 million TEU.
The report’s authors explained that weak consumer demand in the European economies is “having a particularly strong impact on deep-sea laden import volumes to Northern Europe.
And despite the weak consumer demand, they added that following a very difficult first quarter, imports and exports are showing signs of recovery but have a long way to go, due to a slow economic recovery and hesitant consumers.
“Until there is more certainty about economic policies and reduced unemployment, we shall not see a strong resurgence in consumption,” Hackett Associates Founder Ben Hackett wrote.
In an interview with LM, Hackett said that any form of recovery is going to take a fair amount of time to counter the more than two years of declining import and export numbers.
What’s more, the underwhelming trade figures in the report come at a time when there is an excess ocean carrier vessel capacity situation with a large number of new vessels coming on line this year, coupled with an inability of rate hikes sticking with shippers.
“Carriers are taking a lot of smaller vessels out of lay up so the current amount of inactive ones is less than four percent,” said Hackett. “More capacity is coming even though demand is not really picking up.”
With the capacity glut leaving not shortage of vessel utilization options for shippers, Hackett said shippers are currently able to leverage that situation in their favor through lower rates, with rates low on the Trans Pacific side and slightly better for the Asia-Europe trade lanes.
Weak consumer demand in Europe as well as fiscal austerity measures are having a significant impact on import volumes and have for a long time, while still lacking true signals of economic improvement.
“We have been hammering away at the lunacy of those sorts of fiscal policies as it seems they are creating more problems as opposed to solving problems,” said Hackett. “We are seeing the easing of these policies in some areas of Europe, which could help to improve the situation but it is a little too early to tell.”
Looking ahead to the coming months, Hackett said it is reasonable to expect the current trends and metrics to remain intact for at least the next six months.
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