Monday, June 21, 2010

Shipping Line Releases Encouraging Asian Container Figures

NOL Report Signs of Recovery - but is it Sustainable ?
Shipping News Feature

ASIA - Singapore based Neptune Orient Lines (NOL), owners of the APL Container Line and APL Logistics brands, released their four week figures to the end of May today and revealed a 41% upswing in trade, that is containers carried, against the same period last year. At the same time the company, largest logistics and shipping stock quoted on the Singapore Stock Exchange, said the average revenue per FEU (Forty-foot Equivalent Unit) was 19% above the same period last year, largely due to improved core freight rates in a number of trade lanes.

Of themselves the figures could be seen by cynics as a blip and not indicative of any major shift in fortunes, taken together with other signs however it seems to indicate that the Asian trade at least is in recovery, and somewhat faster than many industry analysts predicted.

With the world’s largest container shipping line taking equipment out of mothballs and forecasting a container shortage due in the main to rising cargo levels as reported previously, it seems that a more prolonged recovery may be in progress. Whilst China dances around a proper revaluation of the Yuan this trend is likely to continue. US aspirations of a correction to the currency imbalance, the Yuan having appreciated by nearly a quarter against the dollar in the three years leading up to the financial debacle of 2008, only the vague threat of US protectionism is acting as any sort of catalyst to inspire a currency change which would slow the flood of Asian exports.

Even if the Chinese did revalue to a level acceptable to the Americans this might merely mean that other Asian Tiger economies would fill the manufacturing gap and merely change the ports of consignment. So a steady rise in the figures against the low point of the past year or so may well continue; whether they represent sustainable growth given the parlous state of the economies in Europe and, to some extent the US, remains open to question.