Global Port Tracker expects growth for North Europe ports in 2014, following modest 2013 output

Minimal to modest growth could serve as the theme of the most recent edition of the North Europe Global Port Tracker report produced 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.

With growth in Eurozone nations seeing a mere 0.5 percent GDP, the report observed that the slight gains in trade volumes it saw for the surveyed ports in 2013 were clearly impacted by unemployment at 12 percent, which spurred low consumer demand.

From November to December, the total container volume for the surveyed ports fell 6.1 percent at 3.10 TEU (Twenty-Foot Equivalent Units) and was up 0.2 percent annually. Imports were up 10.4 percent sequentially and down 0.2 percent annually, and exports were down 2.5 percent and 2.1 percent, respectively, for the same periods.

For all of 2013, North Europe ports saw imports fall 1.2 percent annually at 15.84 million TEU, and exports were down 0.3 percent to 17.29 million TEU. Outside of North Europe, total European imports and exports were each up 3.4 percent annually in 2013, with imports at 21.46 million TEU and exports at 17.43 million TEU.

Hackett Associates Founder Ben Hackett noted in the report that when removing transshipment and empty container moves, North Europe ports were up 2.2 percent in 2013, even with a weak fourth quarter.

For 2014, Hackett is forecasting a 3.9 percent annual increase for total volume, excluding transshipment and empty container moves, with exports expected to be up 3.4 percent, following a 1.6 percent increase from 2012 to 2013.

“What this tells us is that there is a significant amount of confusion about the state of the economy in the mind of the consumer as far as imports are concerned, while exporters are struggling to deal with weak demand in Asia,” Hackett wrote in the report. “European inflation is virtually non-existent, bordering on deflation. The impact of negative inflation is that goods become too cheap to produce profitably, which would result in cutbacks in output, which in turn raises unemployment, all of which leads to a further lack of growth. Japan was an example of this for many years with its stagnant economy.

He said that at a time when the European economy continues to underperform, Eurozone nations stick with what he called an “austerity mentality” in an effort to reduce “excessive” government spending and reduce the current account as a share of the GDP.

Hackett added that the ECB’s decision to cut its interest rate to 0.5 per cent has left it with few options to help stimulate the economy.

“As a result, the demand side of the equation is firmly in the hands of the consumers’ sense of confidence in the future on the one hand and China’s economic expansion on the other,” he stated. “Neither of which are showing much sign of a turn round, with output in China’s factories shrinking again in February according to a preliminary report, reinforcing concerns of a minor slowdown in the economy. We still remain cautiously optimistic for 2014.”

Hackett recently noted that there could be a “benign circle of growth” over the next two years, while caution needs to be exercised with European confidence still “shaky,” coupled, with purchasing managers behind reluctant to concede the worst part of the economic downturn in Europe is over.

Even with some hesitance in Europe, Hackett said that it looks like a positive change is coming, with the modest expectations reflecting just how dire the European economy has been in recent years.