[080710.EN.SEA] Drewry Optimism Rises, But 'Next Six Weeks Will Tell Us More'

LONDON's Drewry Shipping Consultants said the industry will know more if the world recession is on the run in the next six weeks after the today's Asian cargo backlog has cleared.

Nonetheless, Drewry upwardly revised its forecast of global container cargo growth more from 5.4 per cent to 8.5 per cent this year, though the good news came with a stark warning.

"We do not concur that it is business as usual," said Neil Dekker, editor of Drewry Container Forecaster. "There is still a huge backlog in the system which is not new demand.

Once moved out, we believe the strength of the summer peak season will be less than many predict. By no means do we see a precipitous fall, but there will be an impact."

The backlog combined with the containers shortage is presenting a false picture of a real recovery from the downturn, he said.

"Slow-steaming strategies are here to stay. By restricting supply more in line with demand, carriers appear to have finally learned that they have the ability to drastically improve their revenue streams," he said.

Mr Dekker also said the old days of the volume shipper being the VIP account appear were over. "Many shippers have told us about lack of space. In this environment, carriers are taking the opportunity to push up rates, [with] peak season and equipment surcharges," he said.

"No longer should carriers send out notices stating rate increases are required to continue 'consistent high levels of service,'" Mr Dekker said. "Many shippers have had their freight bills double in recent months and are still not managing to ship their cargo out of Asia."

The Drewry analysts was not as optimistic as his peers, noted London's Containerisation International. MDS Transmodal, for instance, is forecasting 11.5 per cent growth and Sea-Axis predicting nine per cent, to be followed by 9.3 per cent next year.

Clarkson currently predicts 8.1 per cent growth this year and 10 per cent next.

Drewry believes eastbound transpacific vessel utilisation increased from 82 per cent in the first quarter to 87 per cent in the second, but expects to fall back to 81.4 per cent in the third quarter once full peak-season service is underway.

Once this occurs, transpacific freight rates will be undermined. Nearly 20 per cent fresh capacity was added between the two quarters.

Asia-Europe tonnnage increased 12.4 per cent between the first and second quarters, with a further eight per cent expected in the third. This will reduce utilisation from 100 per cent in the first quarter to 92 per cent in the second and to 90 per cent in the third, according to Drewry estimates

Source : HKSG, 08.07.10.