Monday, September 9, 2013

Snippets - Some Recent Logistics Facts of Container Shipping, Ports, Air Freight, Ferries etc.

Global Cargo Throughput Sees a Recent Upswing in Some Areas whilst Others Stagnate
Shipping News Feature

WORLDWIDE – A quick look at various sections of some of the markets of interest to logistics professionals and others studying world trade patterns, including this week air freight, container shipping, RoRo ferry results and a handful of global port statistics. And please remember, fortune telling is for the fairground, beware any analyst who purports to know anything too much more than the bare facts reveal!

IRELAND – The Irish Continental Group, which numbers Irish Ferries and feeder company Eucon amongst its assets, published half year figures to June 2013 and although port lifts were slightly down, overall the cargo side outperformed passengers significantly. RoRo freight carriage was up 7.9% to 99,700 movements whilst container shipping jumped 11.3% against the equivalent period in 2012 to 140,600 TEU.

Although car volumes fell 4.2% there was a marginal rise (0.3%) in passengers overall resulting in an increase in both revenue, to €120.9 million (up 3.3%), and operating profit, to €6.4 million, a huge 30.6% jump. Whilst net debt fell to €105.4 million from €116 million at the end of 2012 profits before tax dropped to €3.3 million, down by 10.8%. A weak pound was blamed for the loss of tourist revenue and the group disposed of its Feederlink subsidiary as we detailed it would last year and the figures have been adjusted to allow for discontinued operations.

FRANCE – Second quarter results from container carrier CMA CGM showed a 6.9% increase in boxes carried to 2.9 million TEU’s even as the Group’s average freight rate shrank 8.6% over the period, amid what it called ‘an even sharper contraction in the industry as a whole’. Consolidated revenue amounted to $4 billion, up 5.6% over the first quarter but down 2.4% year-on-year. Net debt dropped to $3.8 billion at 30 June, a decrease of $385 million since 31 March whilst equity increased to $4.8 billion, up by $363 million over the quarter.

In a hugely significant move for the industry reported here, in June the French carrier entered into an historic pact with the two other biggest container lines in the world, Maersk and MSC, to form the P3 Network which still awaits ratification as to its legality from the various competition authorities concerned with the East-West ocean trade. CMA CGM also recently sold a 49% stake in its Chinese handling operation, Terminal Link, which heavily impacted on the recent figures, adding $249 million to the consolidated net profit and lifting it to $268 million versus a profit of $169 million in the same quarter in 2012.

WORLWIDE – Port News – Ports of course are by their nature, neutral in economic terms as to whether cargo is import or export, the bottom line being the primary concern to management. This of course means that total tonnages handled do not give a reflection  of a single country's trade, indeed with freight often transhipping from a completely different location this sometimes renders the figures almost meaningless, however the past few months have seen improvements in turnover in many coastal locations as trepidation over world trade has receded.

In Australia, bulk handlers, such as Port Hedland, through which around 20% of the world’s iron ore shipments pass, are not only seeing a rise in turnover, but an improved attitude, confidence doubtless boosted by the change of government which was widely forecast. Not only were the shipments, primarily China bound, up 9% against the previous month but the Port reported a jump of over 20% in tonnage in August compared to last year, statistics based on value of exports being a little misleading due to the much higher market price for ore this year. July saw the largest ever single shipment from the port, 256,646 tonnes aboard the Fortescue owned PSU Eighth.

In Sweden, the Port of Gothenburg saw a rise in the number of containers handled in the first six months of 2013 to over 466,000 TEU, up 2% overall, and with exports rising 4% against an import decline by 1%. RoRo trailers remained static but timber exports, including paper product, fell 3%, whilst car shipments declined 18%.

The German Port of Hamburg reports that it believes the commencement of Russia’s World Trade Organization (WTO) membership accounts for the upturn in cargo throughput with more Russian owned companies opening up in the region. The increase in tonnages which have been seen lately are down to increased feeder activity between the two countries. Behind China, Russia is the port’s second most important trade partner in seaborne container traffic. In 2012, container handling with Russia increased by 13.3% to 676,000 TEU. In the first six months of 2013, container traffic between Hamburg and Russian ports continued to grow significantly, with volumes climbing by 8.3% to 343,000 TEU.

In China meanwhile, ports have mainly reported increased growth for the first half of the year, albeit at a slower rate than hitherto. According to Chinese press reports the southern Guangdong Port of Zhanjiang saw container numbers rise to 159,000 for the first six months, up 11%, with a small cargo volume increase overall as expansion of the port’s facilities continued. Guangxi’s ocean ports witnessed throughput of cargo fall overall by 5.3% (to 135 million tonnes) but again container trade was up to over 690,000 TEU, a 15.7% rise but, in common with much of China’s export figures, a smaller rate of increase than in previous years.

The country’s container trade still claimed an 8.4% rise overall. The ports in the Hebei province in the north of the country had mixed results for the year to the end of July, Tangshan (Jingtang) and Huanghua saw increases, up around 24% and 34% respectively, whilst Qinhuangdao fell 2%. In this region cargoes largely consist of heavy bulk products coal, ore and steel with an overall total throughput for the provinces ports of around 500 million tonnes, up about 16%. Many analysts view exports from this region as the barometer by which they judge the entire country's economic performance.

In the US, the New York ports reached an intermodal milestone with a recent press release confirming that ExpressRail, the Port Authority’s rail system serving New York and New Jersey marine terminals, had handled its 5 millionth shipping container since the rail facility opened in 1991. The total actually passed the magic number in May and the Port of New York and New Jersey Authority calculates the use of the rail option since inception has removed more than 8 million truck trips from the region’s highways. The air quality benefits from this reduction in truck trips are estimated at 4,400 tonnes of nitrous oxide, 88 tonnes of particulate matter and 480,000 tonnes of greenhouse gas.

Since the commencement of ExpressRail the Port Authority has invested $600 million to expand the original terminal to an 18-track facility that straddles the APM and Maher Terminals at the Elizabeth-Port Authority Marine Terminals. Furthermore, the Port Authority built a second lead rail track that allows trains to move into and out of the ExpressRail Elizabeth facility at the same time. ExpressRail facilities also serve the Port Newark Container Terminal and the New York Container Terminal on Staten Island. In addition, the Port Authority four years ago completed construction of the rail support facility along Corbin Street that can handle four 10,000-foot trains daily.

Further south, Port of Houston staff gained permission from the Commission to find a $300 million investment as part of the $3 billion funding the Port Authority estimates will be required by 2028 to finance infrastructure upgrades. By July, Houston had shifted over 21 million tonnes for the year, a 3% increase from the same period in 2012 whilst net revenue rose comparatively by 11% to $25 million.

WORLDWIDE – Airfreight proved to be at its highest level since mid-2011 as the International Air Transport Association (IATA) released its July figures. Global air cargo traffic results for July showed a continuation of the modest improvement trend experienced in June with freight tonne kilometres (FTK’s) up 1.2% in July year-on-year, slightly better than the 0.9% year-on-year increase recorded in June, as growth in Europe and the Middle East offset weakness in Asia. Capacity increased 3.4% versus July 2012, pushing load factor down to 43.3%. However, load factors have stabilised compared to earlier in 2013.

In terms of air cargo, China remained comparatively sluggish and increased capacity in the Asia-Pacific for the first seven months of 2.6% compared to a fall of 2.1% in actual tonnage meant the region fared the worst of all global air freight markets. North America also struggled, FTK’s down 1.7% in the year overall to end of July but with monetary confidence on the up this may change. Africa also struggled with totals for July down 4.9% but still actually improved for the year to date, FTK’s up 2.2% for the period.

European carriers experienced a 1.5% increase in FTK’s in July, again outstripped by capacity which increased 3.5%. July was the second consecutive month in which air freight demand increased, which coupled with the Eurozone’s climb out of recession, gave some rise to cautious optimism and for the first eight months of the year the region's FTK’s rose 0.2% year over year. Latin America saw cargo up 3.1% for July which compares with overall growth for the year. There was only a small capacity increase here which makes this a strong market for carriers.

The Middle East is still considered by many to be the jewel in the crown in terms of air freight activity. July seeing a 14.4% jump in FTK’s against last year with the year overall total rising 11.7% and capacity up 11.1%. Part of the rise in year-on-year growth rate in July is owing to the timing of Ramadan, which took place mostly in July 2013, while in 2012 most of the holiday occurred in August. Ramadan typically gives a boost to air freight demand for Middle Eastern carriers, as air transport of perishable foods and gift parcels increases to/from the region.

US – POLAND - One year ago this week freight and logistics group C.H. Robinson announced it had acquired Polish forwarding outfit Apreo Logistics S.A. and, as of this week the company has been rebranded under the Robinson name. The US based 3PL group took over the sizeable Warsaw headquartered firm as part of a continuing expansion programme with Apreo handling cargo for more than 2,000 customers via its twenty one native offices whilst also maintaining a small presence in Germany.