THIS year's peak season growth of seven per cent between the second and third quarters exceeded expectations, and America's estimated GDP growth of 3.6 per cent also indicates that economic recovery is on the way, said London's Drewry Maritime Research.
But much of the growth appears to have come from goods put into storage, and not purchased, Drewry analysts cautioned. According to US Government records, the change in real private inventories added only 1.68 per cent to third quarter GDP.
Personal consumption spending was up only 1.4 per cent in the third quarter, compared to 1.8 per cent in the second. "It is far from clear if reality will match expectation," said Drewry analysts.
"With the winter season in full swing, exports from Asia to the west coast of North America are now declining. The only question is by how much will they fall?" asked the analysts.
But the ports of Long Beach and Los Angeles, saw full container imports during October and November decline only by 5.2 per cent compared to the monthly average of 676,000 TEU in the third quarter.
The Journal of Commerce's PIERS and Container Trades Statistics puts the fall from Asia to the whole of west coast North America in October at an even lower at two per cent.
Ocean carriers' response to the seasonal cargo fall was only to withdraw 13 sailings in November, compared to 28 in October and 12 in September. This meant that monthly eastbound vessel capacity increased 4.1 per cent between October and November, up to 1.1 million TEU.
Since then, two more seasonal services were withdrawn in December on top of the three in October, though the result was only a 1.5 per cent reduction in overall effective eastbound vessel capacity. But as only 10 sailings were cancelled, December vessel capacity was just 0.7 per cent less than November's.
"All eyes are now on the P3 and G6 Alliance's approaching new services in 2Q 14. The former are described in 'P3 leaves door open for competitors' and the latter in 'G6 expansion just the tip of the iceberg,'" Drewry noted.
The two enlarged alliances are seeking regulatory approval from the US Federal Maritime Commission (FMC). With the G6's 16 per cent and P3's 31 per cent of eastbound vessel capacity from Asia to the west coast of the US and Canada, no one wants to lose market share.
Said Drewry: "As the G6 intends running 14 weekly strings, the implication is that the New World Alliance's PS1 service, which was withdrawn in October, is being brought back."
The consequence of the decline in cargo from Asia to WCSA during October and greater decline in vessel capacity is that average eastbound vessel utilisation climbed from 92 per cent in September to an even healthier 97 per cent, making the decline in freight rates described appear even more irrational than before, said Drewry.
OPINION
29 December 2013 - 21:05
Higher USWC imports show more storage than consumer spending: Drewry
America's estimated GDP growth of 3.6 per cent also indicates that economic recovery is on the way, said London's Drewry Maritime Research.
OPINION
29 December 2013 - 21:05
Higher USWC imports show more storage than consumer spending: Drewry
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