United States Shipping Report Q1 2012
Includes 3 FREE quarterly updates
We have downgraded our US 2012 outlook to 1.6% from 2.4%. Incoming data have been poor, but not recessionary. We see consumer activity continuing to grow at a weak pace, though business investment should continue to outperform. There are also major downside risks to the 2012 and 2013 outlook, with external concerns over the health of the European and Chinese economies, and domestic concerns over the expiry of tax cuts and the reduction in government spending, all of which would have negative knockon effects on port volumes.
We have revised down our expectations for the external sector's contribution to GDP growth over the 2011/12 period, and are anticipating a flat contribution for 2011 and a 0.2 percentage point (pp) drag in 2012. We have pared our 2012 real export growth forecast to 5.0% from 8.0%. This reflects the deteriorating external environment, particularly the diminishing prospects for European demand (our 2012 eurozone growth forecast was cut in September to 1.2% from 1.7%). On the flip side, import growth is set to fall alongside the ailing US consumer, to 5.0% in 2012 (compared to the previous forecast of 8.2%).
Key Industry Data
Key Industry Trends
Savannah's Dredging Dream Kept Alive, But Delays Could Prevent It Being Fully Prepared In 2014 BMI believes the Port of Savannah is a step closer to its dream of dredging the Savannah River after a South Carolina environmental board unanimously reversed its ruling to block the project. The port's shallow depth has been a source of concern as it could prove a major impediment to its ability to capitalise on the Panama Canal's expansion, which is due for completion in 2014. BMI maintains its view that Norfolk and Charleston are the East Coast facilities best placed to take advantage of the expansion, due to the fact that they will be prepared in time for 2014. However, the possibility of a future dredging project for Savannah presents upside risks to our throughput forecasts for the port over the medium term.
Miami's Dredging Project Could Face Further Delays As Port Rushes To Prepare For 2014 Despite the fact that the Florida state governor has pledged to ensure that the Port of Miami has funding for its dredging project, BMI believes that the facility still has some hurdles to clear before it can begin works. A group of environmentalists have challenged the project, saying it threatens the Biscayne Bay. The challenge means that the port, which is already lagging behind neighbouring facilities in the dredging stakes, could face further delays.
Horizon Lines Settles Price-Fixing Claim, More Choppy Waters Ahead Beleaguered US container line Horizon Lines looks set to end 2011 on a positive note, having settled all antitrust claims against it by major shippers on the US-Puerto Rico route. BMI cautions however, that with container shipping rates still on the decline and volumes not recovering, the lines' difficulties are far from over. BMI notes that the fine resulting from the settlement will further add to the woes of the line, which is already faced with a difficult operating environment.
Risks To Outlook
BMI believes the main risks to our outlook for US container shipping are on the downside. A bearish consumer outlook, combined with the withdrawal of shipping lines from the transpacific route and cuts to federal funding for port projects mean that growth in the box shipping sector could be slower than expected.
On the dry bulk side there is upside potential from the fact that we expect the US to become a net exporter of coal over the medium term as domestic demand slows and Asian demand remains strong. We are already seeing the development of new port facilities on the west coast, such as SSA Marine's Gateway Terminal, in order to cater for an expected increase in coal shipments.
We have downgraded our US 2012 outlook to 1.6% from 2.4%. Incoming data have been poor, but not recessionary. We see consumer activity continuing to grow at a weak pace, though business investment should continue to outperform. There are also major downside risks to the 2012 and 2013 outlook, with external concerns over the health of the European and Chinese economies, and domestic concerns over the expiry of tax cuts and the reduction in government spending, all of which would have negative knockon effects on port volumes.
We have revised down our expectations for the external sector's contribution to GDP growth over the 2011/12 period, and are anticipating a flat contribution for 2011 and a 0.2 percentage point (pp) drag in 2012. We have pared our 2012 real export growth forecast to 5.0% from 8.0%. This reflects the deteriorating external environment, particularly the diminishing prospects for European demand (our 2012 eurozone growth forecast was cut in September to 1.2% from 1.7%). On the flip side, import growth is set to fall alongside the ailing US consumer, to 5.0% in 2012 (compared to the previous forecast of 8.2%).
Key Industry Data
- At the port of Los Angeles (LA) we forecast 4.8% year-on-year (y-o-y) growth in total tonnage in 2012, to reach 64mn tonnes.
- At the East Coast port of New York/New Jersey (NY/NJ), growth is forecast to be 3.88% y-o-y in 2012, to reach 153mn tonnes.
- We expect LA to record growth of 1.02% in twenty-foot equivalent unit (TEU) throughput in 2012 to reach 7.98mn TEUs.
- We expect NY/NJ to record a 3.2% increase in TEU throughput in 2012, to reach 5.02mn TEUs.
Key Industry Trends
Savannah's Dredging Dream Kept Alive, But Delays Could Prevent It Being Fully Prepared In 2014 BMI believes the Port of Savannah is a step closer to its dream of dredging the Savannah River after a South Carolina environmental board unanimously reversed its ruling to block the project. The port's shallow depth has been a source of concern as it could prove a major impediment to its ability to capitalise on the Panama Canal's expansion, which is due for completion in 2014. BMI maintains its view that Norfolk and Charleston are the East Coast facilities best placed to take advantage of the expansion, due to the fact that they will be prepared in time for 2014. However, the possibility of a future dredging project for Savannah presents upside risks to our throughput forecasts for the port over the medium term.
Miami's Dredging Project Could Face Further Delays As Port Rushes To Prepare For 2014 Despite the fact that the Florida state governor has pledged to ensure that the Port of Miami has funding for its dredging project, BMI believes that the facility still has some hurdles to clear before it can begin works. A group of environmentalists have challenged the project, saying it threatens the Biscayne Bay. The challenge means that the port, which is already lagging behind neighbouring facilities in the dredging stakes, could face further delays.
Horizon Lines Settles Price-Fixing Claim, More Choppy Waters Ahead Beleaguered US container line Horizon Lines looks set to end 2011 on a positive note, having settled all antitrust claims against it by major shippers on the US-Puerto Rico route. BMI cautions however, that with container shipping rates still on the decline and volumes not recovering, the lines' difficulties are far from over. BMI notes that the fine resulting from the settlement will further add to the woes of the line, which is already faced with a difficult operating environment.
Risks To Outlook
BMI believes the main risks to our outlook for US container shipping are on the downside. A bearish consumer outlook, combined with the withdrawal of shipping lines from the transpacific route and cuts to federal funding for port projects mean that growth in the box shipping sector could be slower than expected.
On the dry bulk side there is upside potential from the fact that we expect the US to become a net exporter of coal over the medium term as domestic demand slows and Asian demand remains strong. We are already seeing the development of new port facilities on the west coast, such as SSA Marine's Gateway Terminal, in order to cater for an expected increase in coal shipments.
Contents
Executive SummarySWOT Analysis
United States Shipping SWOT
United States Political SWOT
United States Economic SWOT
United States Business Environment SWOT
Global Overview
Container Shipping
Lines To Enter 2012 In The Red
Overcapacity To Plague Medium Term, Beware 2013
Table: Snapshot Of Container Lines' Orders
ETR Short And Long Term Benefits To Woo Carrier Expansion
Table: Top 20 World Ports
Port Operators To Face Tougher 2012 As Box Volumes Slow
Container Curse To Hit Box Manufacturers, But Outlook Strong
Dry Bulk
Chinese Slowdown Threat Double Downside Risk To Dry Bulk Shipping
Vale May Find Solace With South Korea As Chinese Troubles Continue
Lines Need To Up Capacity Reduction Strategies To Ease Oversupply
Dry Bulk Lines In Choppy Waters, Possibility Of More Bankruptcies
Liquid Bulk
Dirty Tanker Indices Not Very Buoyant
Differing Strategies, Differing Fortunes
Genmar Bankruptcy Just The Beginning
Survival Strategies For Floundering Tanker Operators
Rumoured Chinese Order Has Potential To Sink Crude Oil Shipping Sector
Industry Trends And Developments
Market Overview
Port Of New York/New Jersey
Shipping
Congestion
Terminals, Storage And Equipment
Expansions And Developments
Multi-Modal Links
Port Of Los Angeles
Shipping
Congestion
Terminals, Storage And Equipment
Expansions And Developments
Multi-Modal Links
Port Of Charleston
Shipping
Congestion
Terminals, Storage And Equipment
Expansions And Developments
Multi-Modal Links
Port Of Houston
Shipping
Congestion
Terminals, Storage And Equipment
Expansions And Developments
Multi-Modal Links
Port Of Long Beach
Shipping
Congestion
Terminals, Storage And Equipment
Expansions And Developments
Multi-Modal Links
Port Of Savannah
Shipping
Congestion
Terminals, Storage And Equipment
Expansions And Developments
Multi-Modal Links
Industry Forecast
Port Of Los Angeles
Port Of New York/New Jersey
Table: Major Port Data – Throughput, 2009-2016
Trade
Table: Key Trade Indicators, 2009-2016 (US$mn and % change y-o-y)
Table: Trade Overview, 2009-2016
Table: US Main Import Partners, 2002-2009 (US$mn)
Table: US Main Export Partners, 2002-2009 (US$mn)
Company Profiles
Horizon Lines
Maersk Line
Mediterranean Shipping Company (MSC)
CMA CGM
COSCO Container Lines Company Limited (COSCON)
Hapag-Lloyd
Evergreen Line
APL
China Shipping Container Line (CSCL)
Hanjin Shipping (Container Operations)
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