There was an unexpected pickup in global trade for the period January-September 2017, with CTS figures that we have not seen for a considerable time. Volumes were 5.44 percent higher than year over year. These growth figures are well in excess of the 1.0 to 1.5 percent times GDP growth that was discussed as the new “norm.”
Many carriers reported profits in the third quarter of 2017. The stability provided by alliances, as well as consolidation in the industry, helped the carriers provide capacity more in line with seasonal trends.
All three major longhaul trades showed growth in the first nine months of 2017: Asia-North America growth of 8.84 percent, Asia-Europe growth of 5.3 percent, and Europe-North America growth of 7.51 percent. This growth helped substantially to fill the stream of capacity that is entering the container trades, and created a situation where ships in excess of 20,000 TEU are expected to become the norm on Asia-Europe; ships of 10,000 TEU to 15,000 TEU will not be uncommon in North American trades.
This, in turn, has led to the cascading of larger vessels into the north-south trades. This has been facilitated by the opening of the expanded Panama Canal and has led to many of the previous Panamax vessels being scrapped earlier than expected, with vessels as young as 8 years old being sent to the breakers.
Ports and inland infrastructure have been challenged by handling larger volumes of containers on a single ship, partly a result restructured shipping alliances.
The prospects for 2018 at this stage look good, even if the growth rates are slightly lower than we have seen in 2017. There could be problems with Brexit, and potentially with imports into the United States as the Trump administration has declared its intention of bringing manufacturing back to the US. The impact of these events in 2018, however, will probably be limited.
Another potential problem the industry could face is the influx of new very-large container vessels into the major trades. This could mean more capacity than is needed, which would affect rates and carrier revenue.