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Positive Economic Outlook Bodes Well for Shipping

February 14, 2017
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After an uneasy year of sweeping ocean carrier consolidation and bankruptcy, industry experts are beginning to cautiously signal improvement in the container shipping market for 2017. Led by growth in consumer spending, containerized imports are forecast to increase 4.6 percent according to Global Port Tracker, a report produced for the National Retail Federation (NRF).

An NRF forecast for 2017 anticipates sales growth in the retail industry between 3.7 percent and 4.2 percent. Higher sales expectations typically, and logically, prompt an increase in shipping activity. “When retailers import more merchandise, that’s a pretty good indicator of what they are expecting to happen with sales,” explains Jonathan Gold of the NRF.

Mario Moreno, senior economist for IHS Maritime & Trade, projects containerized imports to fall in the range of 4 to 5 percent, in agreement with Global Port Tracker. Moreno also anticipates a modest increase of 1 percent in containerized exports, with real GDP expected to grow 2.3 percent – up from 1.6 percent in 2016.

What this can mean for ocean carriers is rate stability, even in an era of overcapacity. Mediterranean Shipping Co. CEO Diego Aponte is optimistic. “Whatever it is, 1.5, 2 million TEUs of additional capacity, which I think we can absorb over time if the market will continue to grow,” Aponte explained to the Journal of Commerce (JOC).

And to drayage truckers, a forecast of steady volumes is always a good sign. Tight truck capacity is a looming threat if volumes pick up, and increasing truckload rates tend to encourage experimentation with intermodal, with shippers looking for savings across multitudes of lanes – as well as securing capacity for the long term.