In short, the statistics depict an industry that is growing but not nearly at the rate implied by that of the orderbook. Last year, global cargo movements measured in teu rose by 2.39% over 2012. Asian exports, the industry’s growth engine grew by 2.8%, according to CTS. Overall, Asia accounts for nearly half the global trade.
The resulting differential between growth rates for cargo and for shipping capacity led to the structural overcapacity that has affected pricing.
On pricing, the CTS index used a base of 100 at the end of 2008. The index dove to 63 in recessionary 2009, jumped up to 102 in a comeback, drifted back to 90 before reaching 103 in July, 2012. From there, prices drifted down to 84 before easing back up to the recent 87. Throw in a factor for inflation, and the adjusted result is pricing that is approximately three-fourths of the starting point five years earlier.
Drilling down into the regional statistics only worsens matters, considering the extraordinary trend towards larger ship sizes over the period, as the industry moved to control expenses by lowering slot costs. That capacity growth has been skewed towards the heaviest trade lanes, like Asia/Europe and the transpacific, that have shown mediocre growth.
The table below shows the year-to-year percentage change in Exports and Imports for the various regions, and, for weighting, also calculates the total flow in 2013.
% % (million teu)
Exports Imports Total Ex/Im
Global 2.39 2.39 253.5
Asia 2.80 0.90 118.6
Europe 4.94 4.77 46.4
N. America 0.06 3.41 36.7
Indian Subcontinent 0.62 3.41 19.7
S/Cen America (1.49) 1.11 15.0
Sub-Saharan Africa (2.54) 6.81 9.2
Australasia/Oceania 4.46 6.80 5.8
There is hope. The CTS figures showed strength in the second half of the year, as December global volumes rose 5.3% from a year ago and 6.1% from November. Factors besides economic growth included Irregular scheduling that affected November shipments and inventory stocking ahead of the earlier-than-usual Chinese New Year.
One bright spot was the relative pickup in the European trades, heavily impacted by the recession. Europe is the target for deployment of the larger ships being constructed. Imports to Sub-Saharan Africa and Australasia/Ocean were pockets of hope.