Europe-Asia/North America box shipping capacity rises slightly
THE container shipping industry faced a challenging market in the first quarter as the US-China trade dispute reduced available capacity on transpacific trade routes and the European economy remained weak, particularly, as Brexit is surrounded by uncertainty, according to data compiled for the Bluewater Reporting World Liner Supply (WLS) Report
THE container shipping industry faced a challenging market in the first quarter as the US-China trade dispute reduced available capacity on transpacific trade routes and the European economy remained weak, particularly, as Brexit is surrounded by uncertainty, according to data compiled for the Bluewater Reporting World Liner Supply (WLS) Report.
The WLS report tracks the estimated weekly allocated TEU capacity of direct ocean liner services on 30 individual trade lanes operating between Asia, Europe, North and South America. The report estimates the weekly-allocated capacity within each specific trade lane and takes skipped sailings and slow steaming into account, American Shipper said.
On the Asia to east coast of North America route, weekly allocated TEU dropped by 5.61 per cent between the fourth quarter of 2018 and the first quarter of 2019, from 147,509 TEU to 139,229 TEU, while weekly allocated TEU on the Asia to west coast of North America trade declined by 6.81 per cent between Q4 2018 and Q1 2019, from 305,474 TEU to 284,674 TEU.
The Q4 2018 WLS Report assumed there would be a reduction in capacity if tariffs enacted by the US and Chinese governments started to lower demand for consumption.
This slowdown in demand can be seen in the results for the first quarter of this year, as tariffs have made goods imported from overseas more expensive. Furthermore, this contraction in demand triggered a reduction in container shipping capacity.
US Chamber of Commerce head of international affairs Myron Brilliant said US-China trade negotiations have progressed to a point where the two countries will most likely strike a deal, with 90 per cent of the talks finished, yet the final 10 per cent is the hardest part to plough through.
While trade from Asia and North America dived between Q4 2018 and Q1 2019, outbound North Europe trades saw modest growth over this period, especially as the economies of Germany, Britain and France are all experiencing sub-optimal growth.
Estimated weekly allocated TEU from North Europe to Asia grew 1.15 per cent between Q4 2018 and Q1 2019, from 224,885 TEU to 227,470 TEU, while estimated weekly allocated TEU from North Europe to North America was 0.83 per cent, from 77,097 TEU to 77,738 TEU.
The relative stability for European exports to North America and Asia suggests that manufacturing has stopped retracting and could be benefiting from the US-China trade row. The growth in exports to Asia and North America could be replacing capacity that would typically be exported from China and the US.
If this hypothesis proves correct and the trade dispute continues through the second quarter, growth in exports from Europe to Asia and North America ought to continue to rise. Conversely, if the trade row is resolved, exports from Europe to Asia and North America are expected to decline as the US and China re-claim their market share.
Westports Q1 profit up 13pc to US$33.8 million, as revenue rises 8pc
MALAYSIA's Westports Holdings increased first quarter net profit 13 per cent to MYR139.9 million (US$33.8 million) drawn on revenues of MYR415.19 million, up eight per cent.
Transshipment container volume improved by 15 per cent to 1.71 million TEU and gateway throughput increased seven per cent to 820,000 TEU, reported the Malaysian Sun Daily.
Westports group managing director Datuk Ruben Emir Gnanalingam said Westports enjoyed favourable volume recovery momentum after having transitioned to a new baseline and transshipment volume in the previous year.
He said Westports is expected to achieve higher overall container throughput in 2019 with growth coming from both the gateway and transshipment segments.
The company is also finalising the planning details for the multi-billion proposed container terminal expansion and would be concluding the necessary detailed studies in the coming quarters.
'The proposed expansion would further strengthen the company and Port Klang's role as the pre-eminent port for the nation's gateway trade and also reinforcing the terminal as one of the main transhipment hubs in the South East Asia region for international container shipping alliances,' said Ruben in a statement.