Alphaliner and Drewry Maritime Research are among analysts raising their growth forecasts for 2017. Based on trading performances to the late summer, and evidence gleaned from the market about future prospects, they expect global container trade to grow in the 5.5% to 6.6% range this year. Projections made at the end of 2016/17 suggested volumes would rise by 4% to 5%.
“Full-year global container throughput growth is on course to rise above an unprecedented 6% in 2017, as robust traffic across all regions maintained its steady upward curve in the third quarter,” Alphaliner researchers wrote in a recent report.
Interestingly, the research group pointed to a significant reversal in the recent TEU to GDP multiplier trend, which, if sustained, would be welcome news for the industry. This is because, since 2015, container trade growth has lagged that of increases in GDP, something that container lines have never experienced before. But this year, and based on trade growth to the end of September, the TEU/GDP multiplier stood at 1.7 points.
“Predictions that the container trade had reached a mature phase of its development, with volume growth expected to grow only on par with GDP, proved to be overly pessimistic,” said Alphaliner. “The uptick in throughput numbers also corresponds with the continuing recovery of the global economy.”
This year has seen stronger growth in line haul trades, such as between Asia and Europe, and also in key emerging markets, including South America, West Africa and Russia. Principally, this is because of some recovery in commodity prices, including for oil and gas, resources on which many of these regions depend.
The analysts also pointed to China as a major reason for the stronger growth in throughput that has taken place this year. “China’s ports, including Hong Kong, reported growth nearing double-digit proportions in the third quarter, of 9.3%,” said Alphaliner. “This drove year-to-date traffic numbers at the country’s terminals through the first nine months of 2017 to 9.1%.”
Drewry’s numbers are similar to those of Alphaliner, with Drewry analysts citing growth of 6% in H1 2017, but expecting a slight slowdown in the second half, and a full-year growth figure closer to 5.5%. While the research group pointed to continuing uncertainties – such as Brexit, President Donald Trump, and particularly his decision to re-impose sanctions on Iran, and his relationship with North Korea – it did not believe that they would have a significant impact on trade.
Drewry said: “Now, at the start of the final quarter of the year, while many of these issues have not completely gone away, none appear critical enough to provoke any economic derailment. After the caution of the previous years, economies have simply got back to doing business this year.
“The world has restocked, and normal growth patterns are, once again, reasserting themselves, but, for next year, we believe there will be a regression to the mean that will result in lower rates of growth in the short to medium term.”
While ocean carriers are obviously grateful for the rising flow of business, overcapacity is an issue, and freight rates remain under pressure. Nonetheless, according to Drewry, shipping lines should earn US$6B this year, which is considerably better than the US$3.5B in losses posted in 2016.
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This complete item is approximately 300 words in length, and appeared in the October 2017 issue of WorldCargo News, on page 16. To access this issue download the PDF here.
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