Predictions for 2010?

Joseph Bonney | Dec 10, 2009 6:39PM GMT

The big question for the international shipping industry 2010 is what kind of cargo volumes we'll see next year. The prevailing view seems to be one of cautious optimism, with a strong emphasis on cautious.

Drewry Shipping Consultants forecasts a tepid 2.4 percent increase in global container volume next year, after a 10.3 percent drop this year.

In the U.S. market, the National Retail Foundation and IHS Global Insight look for increased imports through the top 10 U.S. port gateways in February and March, breaking a streak of 31 consecutive months of year-to-year declines. The report doesn't forecast volumes for the rest of the year.
PIERS Global Information Solutions, a sister company of The Journal of Commerce, paints an optimistic picture of 2010 volume. PIERS forecasts 13.6 percent in growth in U.S. containerized imports next year and a jump of 15.2 percent in imports from Asia, excluding the Indian subcontinent -- increases that still wouldn't make up for this year's plunges in volume.
How do these forecasts match what you see in the market?

Manufacturing demand by eliminating capacity and calling carriers rogue for following a different business model than the cartel reeks of collusion.

- By Gordon Rives Jr. on 12/15/09

Kingston4811 has summed up my take on the Piers forecast well. Even with the low baseline effect of dismal 2009 numbers a 15.2% increase sounds quite optimistic. However, it appears the removal of tonnage and slow steaming are beginning to show results. Up here in Canada, thanks to the removal of one Hapag Lloyd string, rates export to Europe are on the rise. Many carriers are booked until mid to late January. Rate increases on the Transatlantic export trade are generally difficult to achieve, so take this as a positive sign.

On the import side, Transpacific rates are up $600 - 800 per 40'HC from their low mid year. In addition, there is a $500 increase filed by most lines on Jan 1, which is unheard of in the Transpac import trade. My contacts are also telling me that many increases in other trade lanes are sticking.

What this might mean is that demand and capacity (thanks to slow steaming and removal of tonnage) is turning in favour of the carriers. If the industry can collectively keep tonnage out during the generally slow first quarter, profitability might come soonner rather than later for the well managed carriers.

Of course, no one can predict whether any rogue carrier might turn and look for more market share by bringing back idle tonnage too early. However, there will be a steep price to pay for such actions.

- By John Doble on 12/11/09

As much as I would like to agree with the Piers forecast showing a 15.2% increase in imports from Asia (I'm sure this means 15.2% above 2009 levels), I don't see how the U.S. economy will support that level of an increase. The driver has to be retail sales and retail sales are driven by people's confidence in the economy and how many people can afford to spend money. With unemployment at 10% there is simply no way for retail sales to be up in the double digit area. Even if we get unemployment down to 8% that is still nearly double the unemployment rate of 2006. Again I hope Piers is right, I just don't see how they can be.

- By Kingston4811 on 12/11/09