So much for the theory that the rise in the Baltic Dry Index meant that trade volumes were recovering. From Lloyd’s List (hat tip reader Michael):
Asian container ports are bracing themselves for a grim year ahead as they report alarming drops in volumes in January.
Box throughput at Singapore, the world’s largest container port took a 19% dive in January this year to 2m teu compared to 2.4m teu for the first month of 2008.
Singapore’s sharp drop in volumes in particular reflect the collapse in the Asia- Europe trade where it is a key relay port transhipping exports from surrounding countries to Europe and the Middle East.
The picture for world’s third busiest boxport, Hong Kong was even bleaker.
Hong Kong, saw January throughput plunge 23% in January…
“We think February throughput remains challenging. Suspension of trade services, especially Asia-Europe, seems to have not ended at all as announcements had been accelerating….
At Malaysia’s largest port, Port Klang, the picture was not much better. Port Klang Authority general manager Lim Thean Shiang told local press that the port had seen a 16% drop in volumes in the first month of the year compared to January 2008…
The engine of world trade, China saw a very similar drop in throughput in January for its coastal container ports.
China’s Ministry of Transport said throughput of the country’s coastal ports has fallen for three consecutive months on a month-on-month term. China coastal ports handled 8.2m teu in January, down 15% from the same month last year and 10% from December.
The country’s third largest port, Shenzhen, saw throughput fall by 18% to 1.5m teu in the first month of this year. The proportion of empty boxes at east Shenzhen’s Yantian port district has risen from 60% to 80%, according to the city government….
The picture was equally grim for one of Southeast Asia largest exporters with the country’s [Indonesia’s] trade minister Mari Pangestu forecast that its exports could fall by at least 20% this year.
“Based on container flow for January-February, exports volume this year may decline by between 20%-30%. Non-oil and gas exports are expected to fall,” Ms Pangestu said at the weekend.
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I’d again caution people to factor out the Chinese New Year calendar shift, but the trend is pretty clear. Calculated Risk features the data from the other side of the ocean, where our exports have somehow declined even faster, at a 28% clip.
With an economy like this, who needs tariffs?
“Asian Container Traffic Tanked in January”
And Asian tanker traffic was contained in January.
… and they’re struggling to figure out where to put all the empty containers… In HK, they’re running out of room at the main terminal and are now seeking to stack them at Kai Tak, site of the former airport.
No pun intended, I’m sure.
snap, Anon 1:45, that transposition of words was exactly what came to my mind too. Cleverer headline than any of those dumbed-down punning ones.
60-70 percent of outbound containers at LA port have been empty for years now. There is the real collapse of trade, not even double digit reductions in Asian ports.
Amid the gloom, let’s savor the humor of the name “Port Klang.”
Does anyone know the m-on-m growth rate of the Container Traffic?
Y-on-y rate is somehow meaningless now.
I drove from LA to Dallas recently and was amazed by the number of parked container rail cars in the desert. I’m sure there are more empty containers far from the view from the intersate roads.
“Amid the gloom, let’s savor the humor of the name “Port Klang.””
LOL!
How do we reconcile the reported rise in the Baltic Dry Index with this new information?
“How do we reconcile the reported rise in the Baltic Dry Index with this new information?”
Good question. Keep in mind that bdi is also a function of shipping capacity (supply) and not just demand. Capacity has mushroomed over the past few years.
With that in mind…morgan stanley pointed out:
“We believe this [rate hike] does not point to a sustainable rate recovery as laid-up vessels returned to operations and large vessel deliveries act as a floor for rates. We also see rate downside in the upcoming May transpacific contract negotiations. “
The Baltic Dry Index is NOT a measure of container shipping rates. It is a measure of shipping rates for dry commodities, shipped in bulk; eg: iron ore, fertilizer, grains, coal. Dry bulk ships carry raw goods. Container ships carry finished goods. Hence the reputation of dry bulk shipping as a leading indicator.
Here is a link to an excellent blog on the subject : http://shipchartering.blogspot.com.
I don’t understand why we can’t just keep shipping billions of empty container boxes around the world and SAY ‘see! Shipping is FINE!’
That would be another check on the list of things to be able to say are fine so there would be no reason for anyone to be unhappy.
This message brought to you by the Ministry of Compulsory Happiness Enforcement
Year 2032
Yves,
The BDI is an index that rests on assets that can be pulled from service. All these shippers going out of business and all these shippers mothballing their older ships was driving down the rates. It was certainly not due to any pick up in trade. The BDI and its associated indexes (you can even see indexes based on certain routes/ship sizes) are a market subject to both the demand for ships and the supply. Supply is always of premiere importance. Supply, then demand. Also, as noted above, the BDI is a composite for dry bulk products. There are separate indexes for container ships.
Read between the lines and look deeper into the indexes if you really would like an accurate picture of world trade.
Stefan: and they’re struggling to figure out where to put all the empty containers… In HK, they’re running out of room at the main terminal and are now seeking to stack them at Kai Tak, site of the former airport.
May I suggest shipping themall to the US to build chic new homes out of them? For the homeless veterans returning from their tours of duty in Iraq, of course.
Vinny GOLDberg (yet another disgruntled former Veterans Administration employee)