Supply/Demand: Med-North America

MarineLink.com
Tuesday, September 10, 2013
Photo: Drewry

Mediterranean hope
Trade from the Mediterranean to North America is picking up, but off a very low base, so the second quarter’s 8% growth over the first three months of the year could yet turn out to be another false dawn.

Westbound
Cargo growth from the Mediterranean to North America remained promising in 2Q 13, albeit off a low merchandise base. Container traffic increased by 8% compared to 1Q 13, up to 320,000 teu, much of which will have been seasonal, but year-on-year growth in the first half of the year was still 7%.

In the sister tradelane from North Europe to North America, growth between the first two quarters also reached a healthy 9%, but there was a y-on-y decline of 1% in the first half of the year. The point suggests that cargo mix was a big differentiator in the Mediterranean, with building materials to the US probably being a key player. According to Global Trade Information Services (www.gtis.com), the sector (including granite) increased by 9% between the first two quarters, up to 600,163 tons.

Otherwise the signs of economic recovery in the US remain mixed. Although the annual GDP growth rate in the second quarter was recently revised up from a poor 1.7% to 2.5%, and the housing market is improving, unemployment remains at 14% and retail sales are still low.
Westbound Mediterranean-North America Container Traffic (’000 teu)

Ocean carriers’ response was to withdraw some of the capacity that was optimistically added in April and May. The effective capacity of all vessels sailing from the Mediterranean to North America was cut by 0.6% in June, and then, after a month’s standstill, by a further 3.1% in August, down to 144,000 teu. This was achieved only by reducing the average size of vessel deployed in some schedules, as the number of weekly loops remained more-or-less the same, and just a few port rotations were changed. Another three sailings were also cancelled in August, compared to only one in July and three in June.

The exception was Hapag-Lloyd/Hamburg Sud’s jointly run MPS service between the Mediterranean and West Coast North America, whose vessels are being upgraded from 2,800 teu to 4,250 teu. Between June and August, the average size of its nine vessels already increased from 2,800 teu to 3,473 teu due to the deployment of 4 x 4,250 teu ships.

The overall impact of supply and demand at the end of 2Q 13 is that average westbound vessel utilization remained a poor 73% in June, which was the same as in May. Final figures for July are still awaited, but a small improvement is likely. As with previous analysis of this tradelane, these utilization figures need to be treated with caution, however, as its vessels are also used for the transhipment of cargo to/from the Mid-East/Indian Subcontinent and Africa, the quantity of which is difficult to estimate.

Eastbound

Cargo from North America to the Mediterranean remained poor in 2Q 13, falling by 4% compared to the first three months of the year, down to 248,000 teu. Despite this, there was still year-on-year growth of 8% in 1H 13, which is surprising as most Mediterranean countries, such as France, Italy, Spain, Greece and Cyprus, remain in or close to recession.

The comparative changes in the sister tradelane from North America to North Europe were a 3% decline and 0% respectively. Cargo levels are low, however, so small differences in cargo volumes can make big percentage changes.

The consequence of the westbound service changes mentioned earlier is that the capacity of all eastbound vessels fell by 1% in June, down to 149,000 teu, which, after a standstill in July, fell by a further 3% in August, down to 144,000 teu.

his meant that the average utilization of eastbound vessels fell from a poor 58% in May to an even poorer 52% in June, taking freight rates with it.

Drewry believes further rationalization of services seems inevitable, but it is difficult to see much changing prior to the P3 clarifying its intentions after 2Q 14.

drewry.co.uk
 

Maritime Reporter July 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Offshore

Odfjell Drilling in Tighter 2Q North Sea Market

Odfjell Drilling reports second quarter 2014 financial results showing a profit of US$29-million. Profit & loss Q2 2014 Operating revenue for Q2 2014 was USD 272 million (USD 289 million),

Brazil AHTS Contract Breakthrough for Havyard

Havyard says it is to deliver the ship design and equipment for four anchor handling tug supply (AHTS) vessels that are to be built and operated by the Brazilian

EOC Takes Full Ownership of OSVs

On 26 August 2014, EOC Limited agreed to acquire 50% of the entire issued share capital of Lewek Antares Shipping Pte. Ltd. (the "Target") , a company incorporated under the laws of Singapore,

Container Ships

Nine Share in US$6-B DoD Contract Modifications

The US Department of Defense informs that nine companies have each been awarded indefinite-delivery/indefinite-quantity fixed-price option-year two modifications

KKR & Borealis Maritime Acquire 9 Containerships

KKR and Borealis Maritime say they have acquired a portfolio of nine feeder container vessels in a sale process coordinated by Commerzbank. The vessels were previously

Latest Ocean-Going Shipbuilding Orders

Clarkson Hellas notes in its latest 'S&P Weekly Bulletin' shipbuilding orders placed in the dry bulk, tankship, gas carrier and containership sectors, as follows: Dry

News

BMT WBM to Showcase TUFLOW at World Bank Seminar

BMT WBM ( (BMT), a subsidiary of BMT Group Ltd, a leading international engineering and risk management consultancy, is delighted to announce that it will be presenting

Rosneft and AVTOVAZ Strengthen Strategic Cooperation

Rosneft President, Chairman of the Management Board Igor Sechin and AVTOVAZ President Bo Inge Andersson signed an Agreement of development of strategic cooperation,

RWE Dea Helps Cleveland Juniors Reach Goals

Yesterday, a new club house for the Cleveland Juniors Football Club in Middlesbrough in northern England was officially opened. With support from RWE Dea, the

Logistics

DP World 1H 2014 Profit Soars

Global marine terminal operator DP World releases strong financial results from its global portfolio of marine terminals for the six months to 30 June 2014, delivering

ISS Celebrates ISO Accreditation in M.East and Africa

Inchcape Shipping Services (ISS), the world’s leading maritime services provider, is celebrating the awards of ISO 22000:2005 – Food Safety Management System and

Nine Share in US$6-B DoD Contract Modifications

The US Department of Defense informs that nine companies have each been awarded indefinite-delivery/indefinite-quantity fixed-price option-year two modifications

 
 
Maritime Careers / Shipboard Positions Navigation Offshore Oil Pipelines Port Authority Ship Electronics Ship Repair Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2481 sec (4 req/sec)