Gloom in Global Shipping

(Export Development Canada – Peter G. Hall)

As the sun begins to set on 2009, international traders are likely breathing a collective sigh of relief. Accustomed to hefty annual increases, traders are weathering a 17% drop in global volumes thus far in the year, and there are few signs of rebound. Will traders’ fortunes revive in the coming year? […]

This mindset left the world largely unprepared for a correction. But the rising importance of trade tied its fortunes more closely to global trends – in essence, the consumption excesses of the West were exported everywhere, and in many locales, these became production and trade-related-infrastructure excesses. As such, at current activity levels there is sizeable surplus productive capacity worldwide.

Shippers agree heartily. The container business – red-hot in the bubble years – is estimated to have tumbled by over 10% in 2009, the worst year by a large margin in the industry’s half-century history. Certain key ports are registering volume declines of up to 30% in the first half of this year. Ports that handle origin-destination shipping are faring better than the large trans-shipment facilities. Singapore falls into the latter category, and year-to-date traffic is well below the average, down by over 16%. Read more and/or watch the video here.