The economic indicators for the last few months and for the coming three to six months suggest that economic growth is slowing, and as a result trade has flattened out in volume terms. There is some optimism that Germany's GDP may grow by 1.9 per cent this year with a similar rate next year. That may be expecting too much as the leading indicators such as the PMI are pointing in a different direction.
Any expectations that France will power ahead are being destroyed by the riots in Paris and the general unhappiness in the country as a whole. Italy continues to argue with the EU Commission as to what its budget for 2019 should be. A leading indicator for an Ixit?
And let us not forget the almighty mess of Brexit which will damage not just the UK economy but that of the remaining members with trading relations with the UK. The next two weeks will determine to what extent the potential damage might be. The current scare tactics related to growth, or lack of it, are not worth paying attention to. The take-away here is “once you have joined an exclusive club, leaving is frowned upon.”
What can we expect in 2019? Our projections suggest that for the six ports volumes will be about the same as they have been this year for both imports and exports. That view matches the leading indicators which drive our models. When we look at the GDP projections for the Euro area from different sources we see the World Bank at 1.7 per cent, the IMF at 2.0 per cent and the Commission at 2.1 per cent. As we know, forecasting GDP is notoriously inaccurate with constant revisions, but the story here is that growth under two per cent is not enough to expand the economies sufficiently to take the pressure off governments to allow them to lower taxes and increase infrastructure expenditures.
As for the ports, the market share struggle continues, with Rotterdam the clear winner this year. Hamburg continues to struggle in the face of increasing direct calls in the Baltic and weak Russian trade. The carriers are managing to control supply thereby finding some rate relief, but not much. The whiff of collusion fears is noticeable in Brussels.
Ben Hackett
Executive Summary
Preliminary figures indicate that total container volumes across the six-port range decreased by 31,000 TEUs (or 0.8 per cent) in September compared to August with 3.75 million TEUs, which would equate to a 3.0 per cent year-on-year increase.
For incoming volumes, preliminary September data indicates that the ports of Rotterdam and Zeebrugge experienced increases in volume over August, while Hamburg and Bremen/Bremerhaven posted double-digit percentage drops. In terms of year-on-year growth, every port except Hamburg and Bremen/Bremerhaven is anticipated to have posted an increase, with Rotterdam and Zeebrugge experiencing double-digit gains. The North Range is anticipated to have posted a 1.7 per cent decrease from August and a 3.3 per cent gain year-on-year.
For outgoing volumes, preliminary data indicates that the ports of Rotterdam and Zeebrugge posted growth while Bremen/Bremerhaven and Le Havre experienced double-digit percentage declines from August. In terms of year-on-year change, just three ports experienced growth with double-digit increase anticipated at Rotterdam and Zeebrugge. The North Range is projected to have posted a 0.1 per cent increase over August and a 2.7 per cent gain year-on-year.
Total imports to Europe decreased by 3.4 per cent in September, with a 1.4 per cent slide in North Europe (up 6.0 per cent year-on-year) and a 6.5 per cent drop in the Mediterranean and Black Sea region (up 8.6 per cent year-on-year).
Total exports from Europe decreased by 1.2 per cent in September, with a 1.5 per cent slide in North Europe (up 4.9 per cent year-on-year) and a 0.7 per cent dip in the Mediterranean-Black Sea region (up 4.6 per cent year-on-year).
Change in Volume, September 2018 versus:
Source: Global Port Tracker: Europe Trade Outlook, November 2018, ISL, Hackett Associates
For 2018, loaded incoming volumes across the North Range are projected to post a 2.8 per cent increase while loaded outgoing volumes are forecast to post a 2.4 per cent increase.
For 2018, total imports to Europe are forecast to increase by 4.8 per cent, with a 2.2 per cent gain anticipated in North Europe and a 9.3 per cent increase projected in the Med-Black Sea region. Exports are forecast to increase by 3.1 per cent across Europe, with a 1.5 per cent gain in North Europe and a 5.8 per cent gain in the Mediterranean-Black Sea region.
The North American edition of the Global Port Tracker reported an increase of 18,000 TEUs in September. The combined import volume at the monitored West Coast ports increased by 89,000 TEUs between August and September, which equates to a 7.8 per cent gain month-on-month and a 6.6 per cent increase year-onyear. The combined import volume at the monitored East Coast ports decreased by 7.6 per cent (or 67,000 TEUs) in September, for a 4.8 per cent year-on-year gain. The forecast for 2018 projects a 4.7 per cent increase over 2017 with 24.51 million TEUs.
Source: Global Port Tracker: Europe Trade Outlook, November 2018, ISL, Hackett Associates