United States Shipping Industry Update Quarter 1 2012

  • January 2014
  • -
  • Business Monitor International
  • -
  • 125 pages

We have downgraded our US 2012 outlook to 1.6% from 2.4%. Incoming data have been poor, but not recessionary. We see consumer activity continuing to grow at a weak pace, though business investment should continue to outperform. There are also major downside risks to the 2012 and 2013 outlook, with external concerns over the health of the European and Chinese economies, and domestic concerns over the expiry of tax cuts and the reduction in government spending, all of which would have negative knockon effects on port volumes.
We have revised down our expectations for the external segment 's contribution to Gross Domestic Product growth over the 2011/12 period, and are anticipating a flat contribution for 2011 and a 0.2 percentage point (pp) drag in 2012. We have pared our 2012 real export growth projection to 5.0% from 8.0%. This reflects the deteriorating external environment, particularly the diminishing prospects for European demand (our 2012 eurozone growth projection was cut in September to 1.2% from 1.7%). On the flip side, import growth is set to fall alongside the ailing US consumer, to 5.0% in 2012 (compared to the previous projection of 8.2%).

Key Market Data
- At the port of Los Angeles (LA) we projection 4.8% year-on-year (y-o-y) growth in total tonnage in 2012, to reach 64mn tonnes.
- At the East Coast port of New York/New Jersey (NY/NJ), growth is projection to be 3.88% y-o-y in 2012, to reach 153mn tonnes.
- We expect LA to record growth of 1.02% in twenty-foot equivalent unit (TEU) throughput in 2012 to reach 7.98mn TEUs.
- We expect NY/NJ to record a 3.2% increase in TEU throughput in 2012, to reach 5.02mn TEUs.

Key Market Trends
Savannah's Dredging Dream Kept Alive, But Delays Could Prevent It Being Fully Prepared In 2014 BMI believes the Port of Savannah is a step closer to its dream of dredging the Savannah River after a South Carolina environmental board unanimously reversed its ruling to block the project. The port's shallow depth has been a source of concern as it could prove a major impediment to its ability to capitalise on the Panama Canal's expansion, which is due for completion in 2014. BMI maintains its view that Norfolk and Charleston are the East Coast facilities best placed to take advantage of the expansion, due to the fact that they will be prepared in time for 2014. However, the possibility of a future dredging project for Savannah presents upside risks to our throughput projections for the port over the medium term.
Miami's Dredging Project Could Face Further Delays As Port Rushes To Prepare For 2014 Despite the fact that the Florida state governor has pledged to ensure that the Port of Miami has funding for its dredging project, BMI believes that the facility still has some hurdles to clear before it can begin works. A group of environmentalists have challenged the project, saying it threatens the Biscayne Bay. The challenge means that the port, which is already lagging behind neighbouring facilities in the dredging stakes, could face further delays.
Horizon Lines Settles Price-Fixing Claim, More Choppy Waters Ahead Beleaguered US container line Horizon Lines looks set to end 2011 on a positive note, having settled all antitrust claims against it by major shippers on the US-Puerto Rico route. BMI cautions however, that with container shipping rates still on the decline and volumes not recovering, the lines' difficulties are far from over. BMI notes that the fine resulting from the settlement will further add to the woes of the line, which is already faced with a difficult operating environment.

Risks To Outlook
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 segment could be slower than expected.
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.

Table Of Contents

Executive Summary 5
Industry SWOT Analysis 7
United States Shipping SWOT ... 7
United States Political Environment and Risk Analysis ... 7
United States Economic Environment and Risk Analysis . 8
United States Business Environment SWOT .. 8
World Overview .. 9
Container Shipping 9
Lines To Enter 2012 In The Red . 10
Overcapacity To Plague Medium Term, Beware 2013 14
Data : Snapshot Of Container Lines' Orders .. 17
ETR Short And Long Term Benefits To Woo Carrier Expansion . 20
Data : Top 20 World Ports . 23
Port Operators To Face Tougher 2012 As Box Volumes Slow 26
Container Curse To Hit Box Manufacturers, But Outlook Strong 31
Dry Bulk... 34
Chinese Slowdown Threat Double Downside Risk To Dry Bulk Shipping ... 35
Vale May Find Solace With South Korea As Chinese Troubles Continue 39
Lines Need To Up Capacity Reduction Strategies To Ease Oversupply ... 42
Dry Bulk Lines In Choppy Waters, Possibility Of More Bankruptcies . 45
Liquid Bulk .. 49
Dirty Tanker Indices Not Very Buoyant .. 50
Differing Strategies, Differing Fortunes . 53
Genmar Bankruptcy Just The Beginning . 56
Survival Strategies For Floundering Tanker Operators . 59
Rumoured Chinese Order Has Potential To Sink Crude Oil Shipping Segment .. 64
Industry Trends And Developments 68

Market Overview 74
Port Of New York/New Jersey.. 74
Shipping .. 74
Congestion .. 74
Terminals, Storage And Equipment 75
Expansions And Developments ... 76
Multi-Modal Links .. 76
Port Of Los Angeles . 76
Shipping .. 77
Congestion .. 77
Terminals, Storage And Equipment 78
Expansions And Developments ... 80
Multi-Modal Links .. 81
Port Of Charleston... 82
Shipping .. 82
Congestion .. 82
Terminals, Storage And Equipment 83
United States Shipping Report Q1 2012
© Business Monitor International Ltd Page 4
Expansions And Developments ... 83
Multi-Modal Links .. 84
Port Of Houston ... 85
Shipping .. 85
Congestion .. 85
Terminals, Storage And Equipment 86
Expansions And Developments ... 87
Multi-Modal Links .. 87
Port Of Long Beach . 88
Shipping .. 88
Congestion .. 88
Terminals, Storage And Equipment 89
Expansions And Developments ... 91
Multi-Modal Links .. 91
Port Of Savannah. 91
Shipping .. 92
Congestion .. 92
Terminals, Storage And Equipment 92
Expansions And Developments ... 93
Multi-Modal Links .. 94

Market Projection .. 95
Port Of Los Angeles 95
Port Of New York/New Jersey 98
Data : Major Port Data - Throughput, from 2009 to 2016 101
Trade .104
Data : Key Trade Indicators, from 2009 to 2016 (US$mn and % change y-o-y) 104
Data : Trade Overview, from 2009 to 2016 ...105
Data : US Main Import Partners, from 2002 to 2009 (US$mn) .106
Data : US Main Export Partners, from 2002 to 2009 (US$mn) .106
Company Profiles 107
Horizon Lines 107
Maersk Line ...110
Mediterranean Shipping Firms (MSC) .117
CMA CGM .121
COSCO Container Lines Firms Limited (COSCON)126
Hapag-Lloyd ..129
Evergreen Line ..133
APL 136
China Shipping Container Line (CSCL) 141
Hanjin Shipping (Container Operations) ...144
CSAV .148

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