United States Shipping Report Q4 2012

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United States Shipping Report Q4 2012

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We maintain our US real GDP growth forecast for 2012 of 2.0% owing primarily to stronger-thanexpected

economic activity in Q411. Our overall outlook for the US economy, however, has not changed,

and we maintain our outlook for subdued growth at the US's main container ports in 2012, on the back of

continuing concerns about the health of the US economy.

For 2013, we have lowered our growth forecast to 2.1% from 2.4%, owing to increasing domestic and

external headwinds. The downside shock risks remain prevalent, but the balance of evidence suggests that

the economy has and will continue to avoid recession barring a major crisis. There are two major risks to

the economy over the next 6-12 months. The first is the impending fiscal tightening set to impact in

January 2013 absent an active policy decision to postpone. The second, which we have discussed many

times before, is the eurozone crisis, which threatens the global economy as a whole.

Volumes at US ports will face headwinds in the form of sluggish private consumption recovery and slow

demand for exports. US private consumption will continue to recover very slowly as a combination of

still-high unemployment, ongoing deleveraging, low wage growth and a dependency on government

transfers continue to weigh on spending growth.The US export sector is likely to face increasing

headwinds from abroad, centred around reduced European demand amid a eurozone recession and

potential for dollar strength. Just under one-quarter of US exports go to the European Union, and the

European crisis is likely to impact upon non-eurozone demand for US goods and services.

Key Industry Data

• At the port of Los Angeles (LA) we forecast 4.8% year-on-year (y-o-y) growth in total tonnage

in 2012, to reach 66.7mn tonnes.

• At the East Coast port of New York/New Jersey (NY/NJ), growth is forecast to be 3.9% y-o-y in

2012, to reach 145.4mn tonnes.

• We expect LA to record growth of 2.6% in twenty-foot equivalent unit (TEU) throughput in

2012 to reach 8mn TEUs.

• We expect NY/NJ to record a 3.2% increase in TEU throughput in 2012, to reach 5.7mn TEUs.

Key Industry Trends

Competition For Virginia Ports Heats Up

BMI is unsurprised by the competition that APM Terminals (APMT) is facing in its bid to take over the

operation of the Virginia Port Authority (VPA)'s facilities. The Virginia ports have potential for serious

expansion in their annual throughput, especially the Port of Norfolk. The port has already posted strong

growth figures for the year so far, exceeding real GDP growth in the US. We note, however, that given its

international terminals-operating experience, and the potential it has to bring in major container shipping

services, APMT might be the best firm for the job.

Charleston To Outstrip US Rivals

The Port of Charleston, on the US's East Coast, is, according to BMI's projections, set to secure stronger

growth in 2012 than any of the other US facilities for which we forecast container throughput. With the

funds for its dredging works now guaranteed we believe that the facility will continue to enjoy strong

growth over both the medium and the long term, as it seeks to benefit from the throughput increases at

East Coast and Gulf ports following the completion of the Panama Canal expansion.

Crane Buy For Long Beach's Future

BMI believes that the new Middle Harbour terminal to be developed at the US West Coast port of Long

Beach will provide upside potential to the port's long-term container throughput prospects. The terminal

is being developed by Orient Overseas Container Line (OOCL), the shipping and container terminaloperating

subsidiary of Orient Overseas International. The recently announced purchase of equipment for

the terminal, the largest ever crane buy in the US, affirms the company's commitment to making the

terminal a success and the Port of Long Beach a force to be reckoned with once again.

Risks To Outlook

The US economic recovery remains slow; BMI expects average annual GDP growth of 2.5% to 2021.

Further downside is presented by the expected slowdown in Chinese economic growth, which will

damage demand from the US's biggest export market. The eurozone is unlikely to be able to pick up the

slack, due to the ongoing crisis there. BMI believes the main risks to our outlook for US container

shipping are on the downside. A bearish consumer outlook, combined with the withdrawal of shipping

lines from the transpacific route and cuts to federal funding for port projects mean that growth in the box

shipping sector could be slower than expected.

Upside potential is presented to east coast ports by the expansion of the Panama Canal, due for

completion in 2015. The project will allow post-Panamax vessels to pass through the Panama Canal to

call at east coast ports, bypassing the traditional US hubs of LA and Long Beach.

On the dry bulk side there is upside potential from the fact that we expect the US to become a net exporter

of coal over the medium term as domestic demand slows and Asian demand remains strong. We are

already seeing the development of new port facilities on the west coast, such as SSA Marine's Gateway

Terminal, in order to cater for an expected increase in coal shipments.

BMI Industry View .... 5

SWOT Analysis .... 7

United States Shipping SWOT 7

United States Political SWOT 8

United States Economic SWOT ... 8

United States Business Environment SWOT .... 9

Global Overview – Container Shipping .... 10

More Positive Box Outlook In H212 ... 10

Box Supply Demand Imbalance Worsens . 11

Concerted Rate Push Must Continue .. 20

Bunker Price Still A Worry .. 23

2013: A Year Of Mega Realisation 24

Containerisation Revolution Hits Dry Bulk .. 31

Global Overview – Dry Bulk Shipping . 34

Stockpiling: A Threat To Dry Bulk Shipping . 34

Overcapacity A Long Term Problem .. 37

Bankruptcies To Continue .... 40

Vale's Forced Diversification Hedges Against China Slowdown . 44

Protectionism Trend Takes Off . 49

Global Overview – Liquid Bulk Shipping . 54

Executive Summary: Unconventional Sectors To Outshine Traditional Crude 54

Dirty Tanker Index To Remain Depressed .... 55

Bunker Prices Down, But So Are Rates ... 60

Table: BMI's Bunker Fuel Forecasts, 2010-2016 ($/Bbl) . 60

Iran Sanctions Continue To Affect Crude Shipping 63

Saudi Arabian Merger Bad News For Other Operators ... 65

Table: Biggest Operators Of VLCCs & ULCCs . 66

Bullish On Golar LNG Prospects .. 67

Tight Market Creates Boom Times For Rig Sector . 71

Industry Trends And Developments ... 75

United States Container Shipping Market Overview .. 83

Industry Forecast ... 92

Port of LA ... 92

Port of New York/New Jersey ... 96

Table: Major Port Data, 2009-2017 ... 98

Table: Key Trade Indicators, 2009-2017 102

Table: Trade Overview, 2009-2017 ...103

Table: Main Import Partners (US$mn), 2002-2009 ....104

Table: Main Export Partners (US$mn) , 2002-2009 ...104

Company Profiles . 105

United States Shipping Report Q4 2012

4

Horizon Lines .105

Maersk Line ....109

Mediterranean Shipping Company (MSC) ...115

CMA CGM .119

COSCO Container Lines Company Limited (COSCON) ..126

Hapag-Lloyd ...130

Evergreen Line ....135

APL ..139

China Shipping Container Line (CSCL) .144

Hanjin Shipping (Container Operations) 150

Mitsui OSK Lines (MOL) (Container) 154

Demographic Outlook .... 159

Table: The United States' Population By Age Group, 1990-2020 ('000) ....160

Table: The United States' Population By Age Group, 1990-2020 (% of total) 161

Table: The United States' Key Population Ratios, 1990-2020 ....162

Table: The United States' Rural And Urban Population, 1990-2020 ....162

To order this report:

Maritime_Transport Industry: United States Shipping Report Q4 2012

Nicolas Bombourg
Reportlinker
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