Cargo demand to improve in 2011 – TSA

Container lines of the Transpacific Stabilisation Agreement (TSA) expect cargo demand to continue to improve in 2011 as the US economy recovers, roughly in line with new vessel capacity entering the Asia-US trade lane over that period, reported Manila Bulletin.


With a traditional third quarter peak season now considered likely, TSA says that additional ships now being delivered will ultimately be needed and well-utilised.


“After demand growth of more than 15 percent in 2010, we expect further growth in the seven to eight percent range for 2011,’’ said Y.M. Kim, president and CEO of Hanjin Shipping Co.


“This continued cargo growth, from a much higher base, is in our view a very positive sign of recovery,’’ said Kim, noting that cargo activity is somewhat quieter than expected in the run-up to Lunar New Year holiday factory closures in Asia.


But he added that “advance bookings and market data suggest a return to robust trade flows by late spring and early summer, with a possibility that vessel space and equipment will be tight at times leading into the peak season."


TSA noted 2011 industry forecasts of 8.8 percent growth in transpacific capacity and added that delays on new vessel deliveries, heavy demand for ships on intra-Asia routes and other factors will temper the impact of that growth as well.
Reinvesting in carrier service networks to meet demand growth and serve customers' specialised needs make its recommended programme of adjustments to rates and charges all more critical.


“All of us had to hit the ground running in early 2010 climbing out of the deepest global recession in decades, redeploying assets and restoring services,’’ Kim pointed out.


“Carriers rushed to fill ships, did not always get their pricing right, and at times alienated valued customers as they struggled to recover. Our focus in 2011 must now be to rebuild relationships, based on reliable services at fair, stable prices. Our aim is to stabilise rates and avoid the dramatic peaks and valleys that have characterized the trade for the last several years."


TSA's internal reporting indicates that fourth quarter 2010 carrier vessel utilisation was higher than that portrayed in recent analyst or press reports, and were typical for the onset of the traditional post-holiday winter season.


Average West Coast utilisation among TSA's 15 members, for example, ranged from a high of 96 percent in late October to a low of 79 percent in early December. East Coast utilisation ranged from 94 percent in early October to 84 percent at the end of November. Utilization in early January 2011 was 88 percent to the West Coast and 95 percent to the East Coast.
(Source:http://www.cargonewsasia.com)