Falling well short of disaster

Strangely enough, this happens every year. So why is everyone saying that this year is going to be different?

It could be the economic performance of the European economies with weak to marginally negative quarterly growth rates or it could be the under-utilised container ships loading and discharging at the main ports. The former, with the exception of the UK and the PIGS (Portugal, Italy, Greece and Spain) are actually doing better than expected. This is not to say that they are doing well, but it could be worse. The latter is due to too much capacity rather than purely a lack of demand.

Expect to see busy ports in August as the goods loaded in late June and July are discharged. September through November might not be so good after stores have built up their inventories.

So why are so many informed commentators suggesting that European trade will have negative growth this year? What are they reading that I am not? Consumer confidence indices are useful but may not reflect the actual willingness to spend money. North Europe and North America should end this year with small, but positive growth in trade. Asian ports will see a slowdown, but certainly nothing like they experienced in 2009. The Mediterranean ports and the Black Sea on the other hand are not in such good shape. Imports are being hit by the austerity measures and virtual national bankruptcies in Greece, Italy and Spain. Exports to Asia are also down.

Terminal operators are reporting a mixed result for the first half of the year. Volumes are weak, but no one is losing money. Carriers are holding firm in their informal fraternity, with freight rates more or less sticking. Maersk, APL and Hapag Lloyd are reporting positive results after their slide last year.

The take-away is that things are not so good, but they are falling well short of a disaster.