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

Offshore

Cat, Deltamarin Develop Modular FPSO Power Unit

Caterpillar Launches New Modular Solution Developed with Deltamarin for FPSO and Offshore Platform Main Power at 2014 Rio Oil & Gas Expo and Conference Caterpillar

Technip Further Optimizes its Subsea Assets

Technip signed today an agreement to sell 100% of its North American diving assets to Ranger Offshore Inc.(1). Technip’s strategy focuses on high technology

InterMoor UK Completes 2,300 Accident-free Projects

InterMoor UK Operations, part of Acteon’s foundations and moorings business, says it has completed seven years and more than 2,300 projects without a single lost-time incident (LTI).

News

Gladding-Hearn Delivers Third NYPD Boat

With more than a dozen patrol boats and a fireboat built by Gladding-Hearn Shipbuilding, Duclos Corporation, operating in New York Harbor, the Somerset, Mass.,

Cook Joins Horizon Shipbuilding as Operations VP

Horizon Shipbuilding, Inc. announced that Mickey Cook has joined the corporation as the Vice President of Operations for the Bayou La Batre shipyard. Cook, one of the founders of C & G Boatworks,

Update: SS Central America Salvage

Odyssey Marine Exploration completes current phase of SS Central America recovery; 15,500+ gold and silver coins, 45 gold bars recovered to date; 161,000-square meter,

Logistics

China, Sri Lanka to Launch FTA Talks

Chinese President Xi Jinping began a visit to Sri Lanka on Tuesday agreeing to open bilateral negotiations for a free trade pact as Beijing tightened its embrace

Cargo Container Security Alliance Formed

SC-integrity, Inc. (LoJack SCI) and Contguard Ltd. announced a strategic alliance designed to provide their customers with security and real-time visibility of

Mideast Crude Tanker Rates Near 3-month Low

Crude oil tanker earnings on the major Middle East route fell to their lowest in nearly three months as a slowdown in business in recent days battered rate sentiment.

 
 
Maritime Contracts Maritime Standards Navigation Offshore Oil Port Authority Ship Electronics Ship Simulators Shipbuilding / Vessel Construction Sonar 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: 0.1827 sec (5 req/sec)