Container volume through North European ports will remain sluggish this year as the continent’s economy struggles, Hackett Associates and the Bremen-based Institute of Shipping Economics said in their Port Tracker report.
Containerized imports from European ports are projected to decline more than 2 percent this year, compared with a 3.8 percent increase last year. Exports are expected to rise 2.4 percent this year, compared with an increase of nearly 11 percent last year, the report said.
During the next six months, imports are expected to rise 2 percent, compared with a decline of 0.3 percent a year earlier. Exports are expected to inch up 0.1 percent, compared with a 7.9 percent increase during last year’s June-November period.
“The European economic data makes for depressing reading. A no-growth GDP in Q2 in Germany is interpreted as a major achievement. Austerity remains the policy,” said economist Ben Hackett, founder and principal of Hackett Associates.
He said virtually any economic gauge points to an economic downturn that will cause the eurozone to follow the U.K., Spain, Portugal and others into recession.
Hackett and Michael Tasto of ISL, the report’s co-author, said weak cargo volumes would affect terminals and pressure carriers to reduce rates. Hackett noted that carriers already are dropping voyages during what normally is the peak season.
Tasto said carriers have stretched their capacity by slowing vessel speeds and putting 11 ships on weekly Asia-Europe services. He said, though, that carriers cannot expect to squeeze more out of slow-steaming.
Hackett said carriers are likely to resume price-cutting, and that 2010 may turn out to be the carriers’ only profitable year in five years. “They profess to avoid a price war this time around, but we doubt that the habit of a lifetime can be avoided,” he said.