Alphaliner: Global container port throughput is still expected to grow by 2.5% in 2019 despite rising trade tensions and weaker global GDP growth.
- Total throughput grew by an estimated 2.8% globally in the second quarter of 2019, rising marginally from 2.7% in the first quarter.
- Although volume growth is expected to weaken in the second half of this year, the full-year growth rate will remain positive, with resilient container volumes.
- However, the TEU-to-GDP multiplier is expected to drop below 1 this year, as total container volumes will grow by less than the global GDP growth.
Container volumes continue to grow despite trade war threat
Despite the United States’ escalation of the ongoing trade war, global container volumes will continue to grow this year. Alphaliner’s latest projections predict aggregate container port throughput for the full year to increase by 2.5% in 2019 – a downwards revision from the 3.5% growth estimate we published in January.
The International Monetary Fund has also revised its global economic and trade growth projections downwards in its ‘World Economic Outlook’ update on 18 July and warned of further downside risks to these forecasts. Global GDP growth in 2019 was downgraded from 3.3% to 3.2%, while global trade volume growth was downgraded from 3.4% to 2.5% as the IMF noted a significant slowdown in global trade due to rising trade tensions.
It is worth noting that the IMF downgrades were published before the USA announced its latest round of import tariffs on 1 August. These comprise an additional 10% of tariffs on $300 Bn worth of imports from China, starting from 1 September. Beijing swiftly retaliated, announcing on 5 August that China would halt all new imports of agricultural products from the US.
The escalating trade tensions will have a negative impact on container volumes, with the ‘TEU-to-GDP growth multiplier’ expected to fall to less than 1 in 2019. The multiplier has seen a steady decline over the last 30 years from over 3 times in the decade from 1990 to 2000, to less than 1.5 times since 2010.
Global port throughput remains resilient in Q2 of 2019
Container throughput growth remained resilient in the second quarter of 2019, with Alphaliner’s survey of global ports recording a 2.8% growth in period from April to June.
The preliminary growth rate was slightly above the first quarter’s rate of 2.7%, as the ongoing Sino-US trade war failed to bring down overall container volumes.
Volume growth at Chinese ports (including Hong Kong) slowed to 3.5% in the second quarter, compared to 4.2% in the first.
Hong Kong continues to retreat, with volumes dropping by -8.1% in the second quarter, while other coastal ports in mainland China saw growth rates fall to 4.6%, down from 5.2% in the first quarter.
North American volume growth also slowed to 2.9% in the second quarter from 4.7% a quarter before. Combined volumes at Los Angeles/Long Beach fell by -0.5% in the quarter, but all other main North American ports registered volume gains, including New York/New Jersey (+5.1%), Savannah (+1.0%), Seattle/Tacoma (+4.5%), Vancouver (+1.9%), Norfolk (+9.7%), Houston (+11.4%) and Charleston (+2.4%).
Ports in Europe registered the strongest gains in the second quarter, led by Rotterdam and Antwerp that reported gains of 5.5% and 9.1% respectively.
The German ports have not yet released their first-half volume results but their performance is expected to be mixed with solid gains in Hamburg, offset by losses at Bremerhaven. Ports in the United Kingdom are expected to post weaker numbers due to Brexit-related uncertainties.
Sea News Feature, October 1