Container throughput to revive

Last year with its economic recession hit severely the global market of container shipping. The leading ports in the world demonstrated 25% drop of container throughput by the end of the year compared with the previous year. The container terminals were the worst hit by economic slump. At the same time dockers started talking about the end of the crisis, after which a timid recovery of cargo traffic could start this year - by some estimates up to 15-20% compared to 2009.

Santa Claus to be the growth’s cause

According to the annual reports of largest ports, containers throughput showed year-of-a year growth in December 2009.

According to the Customs of the port in Shanghai, the export of one of the world's largest port regions grew for the first time in 14 months in December last year - by 23.5% compared to the figures of December 2008 and by 13.1% compared to the previous month.

Also the container throughput in the port of Hong Kong demonstrated the positive trend for the first time in December 2009. It was 3% up compared to the figures of December of the previous year. But at the same time there was year-over-year 14.6% decline in port capacity - to 20.9 million TEUs.

Port of Singapore had a 1.6% and 5.9% increase in November and December correspondingly, while there was year-over-year 13.5% drop in container turnover at the port - to 25.86 million TEUs.

Container throughput at the port of Long Beach in the North-America was 21.9% down - to 5.48 million TEUs. But in December like other ports it has also shown positive dynamics of growth. The increase of turnover made up 8.7% compared to the figures of December 2008 (for the first time since 2007). Port capacity of Los Angeles also grew in December, although less significantly - by 0.35%.

While the volume of handled containers increased at the end of the year, the market of container traffic revived and the new trend started growing in strength. "These figures are much more promising than we expected. Such outcome may be a sign of economic recovery", Richard Steynk, executive director of the Port of Long Beach commented on the turnover increase in December. According to his opinion, there is reason to assume that this market could bring new uptrend.

 "We are optimistic about 2010, cherishing the hope that consumption would improve cargo traffic for import and restoration of the world market would support exports," Geraldin Knats, the executive director of the port of Los Angeles said. According to a study ordered by the ports of Los Angeles, moderate growth of container flow is expected in the new year.

Dmitry Baranov, a leading expert of Finam Management said in his interview to IAA PortNews, it would be premature to talk about sustainable growth this year. At the same time, he believes, there could be 15-20% recovery of the market at the end of 2010. "Political factors play significant role here, especially it refers to the situation with Somali pirates and the establishment of alternative routes for the delivery of goods”, analyst says.

Russian Reality

Russia did stand on the sidelines from global trends - neither in the fall of container throughput, neither in the positive dynamics reached at some of the terminals by the end of the year, nor in the influence of political factors on the situation.

In average, a decline of turnover of the leading container terminals exceeded 30%. In particular, the volume of transshipment of containers at the facilities of National Container Company (NCC) amounted to more than 32% - up to 1 million 154 thousand 785 TEUs for 2009 (given the terminal UKRTRANSCONTAINER stopped performance  in Ilyichevsk, Ukraine ). Big Port of St. Petersburg (where the terminals NCC and N-Trans operate) reduced handling of containers at the same percentage - up to 1 million 343 thousand 675 TEUs.

The total container turnover of the terminal Novorossiysk Commercial Sea Port (NCSP) decreased by 38.4%.

Vladivostok Container Terminal demonstrated 15% fall by 2008.

At the same time the container throughput at a number of terminals in Russia as well as abroad grew by the end of the year compared to the same period last year. In particular, the increase of transshipment volume at First Container Terminal JSC (FCT, St. Petersburg) made up 0,7% in December and at the facilities of Novorossiysk Nodal Forwarding Company OJSC (NUTEP)  49,32% - up to 18.1 thousand TEUs. Besides for the first time terminal handled such volume of containers per month. The overall performance of FCT and NUTEP dropped by 11.5% in 2009.

 
As NCC reported to IAA PortNews, the maximum fall of cargo turnover fell on the beginning of 2009, when the decline at the NCC terminals exceeded 20% compared with the figures of previous year. In the second half of 2009 the company managed to reverse the negative trends and to stabilize cargo turnover. First of all, this can be explained by the increasing volume of export cargo handled at the terminals of the group, as well as by the ship calls of new clients.

"But still it is too early to talk about overcoming of crisis consequences in Russia – there is more than 30% decline in the sector of container traffic in 2009 and we expect a full market recovery will not happen until the end of the year. Accordingly, in 2010 we will keep our work under the conditions of tough competition ", Olga Denschikova, Marketing Director of NCC said in an interview to IAA PortNews.

In these circumstances, the company plans to expand capacities of its own terminal - in particular, the extension of the wharf to 397 meters will be completed at terminal of NUTEP, so it will be able to handle larger ships or to receive two ships simultaneously.

What concerns political factors that may have a significant impact on the market of container traffic in Russia, we can single out the establishment of the Customs Union of Russia, Belarus and Kazakhstan, as well as the implementation of the concept of customs clearance transfer to the state border. According to Ruslan Kissa, Chairman of the Board of Directors of Russian logistic service provider JSC, it is planned to carry out reallocation of imported container traffic to the Northwest, primarily to the Big Port of St. Petersburg, since the summer of 2010, when the common customs space of the three countries will be fully formed. The customs clearance in Central region of RF will not take place anymore (in connection with the implementation of the reform of the customs clearance transfer to the state border). "In this respect, if the customs administration is carried out correctly and taking into account the development of  "dry ports ", the port of St. Petersburg will have mind-blowing prospects", Ruslan Kiss said in his conversation with IAA PortNews.