Wednesday, March 31, 2010

Global Shipping Rebound Gains Steam, Leading to Shipping Delays, Some Shortages of Container Ships

I've had a couple of persistent requests for updates on global shipping trends, so here is a summary of recent news:

1.
Packed Containers Piling Up At Asian Ports Because There's Too Much Demand From West - "Packed containers are piling up at Asian ports as strong demand from the U.S. and Europe causes a lack of supply of ships. Shipping companies had purposefully idled capacity during the economic downturn, then started to bring it back recently. Yet they didn't do it fast enough to keep up with the robust pick-up in demand from the West."

2.
Shippers Rattled By Shortage Of Ships Due To Trade Surge - "Here's a breath of fresh air for struggling container ship owners -- U.S. shippers are starting to worry about a shortage of container ships, due to the recent trade rebound on Transpacific routes.

A lot of ships were idled during the economic downturn and this dormant capacity is unlikely to come back online fast enough alongside a surge in shipping activity. It's a tangible sign that the global trade rebound is both real and gaining steam."

3.
Rumor: Flood Of Idle Ships Coming Out Of Lay-Up Because They See A Sustained Global Rebound - "Ship owners and managers with a ground-level view of global trade, plus massive skin in the the game of physically shipping goods (bringing a ship out of lay-up is a risky proposition), are starting to regain confidence in the current global rebound. That says a lot more than any pundit or analyst could since when ship owners get it wrong they get murdered (figuratively, usually)."

4.
U.S.-Bound Boxes Pile Up in Asia as Lines Avoid Adding Ships - "South Korea’s biggest port, overwhelmed with empty containers a year ago, is now dealing with shipping lines that have more cargo than they can carry. Surging shipments of furniture, electronics and clothes to the U.S. and Europe, coupled with capacity cuts by shipping lines, has caused as much as 15 percent of containers to be delayed in Busan this year, often by more than a week, according to Park Jong Ho, assistant general manager at Busan International Container Terminal Co.

“With the economy recovering, we have been seeing a lot of containers that didn’t make it out on time because there wasn’t enough space on ships,” he said.

9 Comments:

At 3/31/2010 9:14 PM, Anonymous gih said...

wow! can this ship still stand when a big storm came to the ocean? really great one.

 
At 3/31/2010 11:54 PM, Blogger Joe Lais said...

We are on notice from our freight forwarders that as of May 1st we will see 30-40% increases in cost from China to the US. We were told the shipping companies are purposely holding capacity below demand to pump rates up.

 
At 3/31/2010 11:54 PM, Blogger montestruc said...

Probably it can (the ship). Of course that depends on how bad the storm is. Do recall that sailing ships have masts as tall or sometimes taller than the length of the beam. Ships are designed to hold up under specified harsh weather conditions, even fully loaded and with (some) damage.

Never the less smart captains run from bad storms. I work as an engineer for a Naval Architecture firm.

 
At 4/01/2010 10:24 AM, Blogger misterjosh said...

I sure hope you're right Mark!

 
At 4/01/2010 12:49 PM, Anonymous gettingrational said...

I sure hope you are wrong professor!

The decade 2000 - 2009 was a decade of profligate consumption both privately and governmently. We now need a decade of production of goods and services sold as Exports from the U.S.

The decade 2010 - 2019 needs to be the decade of Production for the U.S. or else it will be another lost 10 years. Another lost 10 years will severely weaken the U.S. and atrophy of newly gained liberties for people around the world will quicken.

 
At 4/01/2010 1:50 PM, Blogger Ron H. said...

>"I sure hope you are wrong professor!"

Do you mean you hope we can't buy the things we want, as evidenced by the increased demand?

>"The decade 2010 - 2019 needs to be the decade of Production for the U.S.

What do you recommend? Should someone forcibly direct this from above?

>"...newly gained liberties for people around the world...

Well, then, there's the answer to our trade imbalance. If others around the world are gaining liberties, they must be importing them from us. As I look around, I see fewer and fewer in this country, so we must be exporting them.

I sure hope we're getting something very valuable in return.

 
At 4/01/2010 2:51 PM, Anonymous gettingrational said...

"Well, then, there's the answer to our trade imbalance. If others around the world are gaining liberties, they must be importing them from us. As I look around, I see fewer and fewer in this country, so we must be exporting them.

I sure hope we're getting something very valuable in return."


The return has been indebtedness to totalitarin econimies.

 
At 4/01/2010 4:32 PM, Anonymous gettingrational said...

"The return has been indebtedness to totalitarin econimies."

Correction: economies! Yikes on my spelling.

 
At 4/06/2010 4:19 PM, Blogger Michael said...

Planet Money had an interesting podcast recently suggesting that shipping capacity had been overbuilt by ~50% and would take years to work off, and was like the housing bubble but a few years behind in its life-cycle. "Ships that cost more than $100 million a few years back now go for $40 million." Check it out at http://www.npr.org/blogs/money/2010/04/podcast_6.html

 

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