2012-11-18 04:36:34 - New Transportation market report from Business Monitor International: "United States Shipping Report Q4 2012"

We maintain our US real GDP growth forecast for 2012 of 2.0% owing primarily to stronger-thanexpected economic activity in Q411. Our overall outlook for the US economy, however, has not changed, and we maintain our outlook for subdued growth at the US's main container ports in 2012, on the back of continuing concerns about the health of the US economy.

For 2013, we have lowered our growth forecast to 2.1% from 2.4%, owing to increasing domestic and external headwinds. The downside shock risks remain prevalent, but the balance of evidence suggests that the economy has and will continue to avoid recession barring a major crisis. There are two major risks to the economy over the next 6-12 months. The first is

the impending fiscal tightening set to impact in January 2013 absent an active policy decision to postpone. The second, which we have discussed many times before, is the eurozone crisis, which threatens the global economy as a whole.


Full Report Details at
- www.fastmr.com/prod/499903_united_states_shipping_report_q4_2012 ..


Volumes at US ports will face headwinds in the form of sluggish private consumption recovery and slow demand for exports. US private consumption will continue to recover very slowly as a combination of still-high unemployment, ongoing deleveraging, low wage growth and a dependency on government transfers continue to weigh on spending growth.The US export sector is likely to face increasing headwinds from abroad, centred around reduced European demand amid a eurozone recession and potential for dollar strength. Just under one-quarter of US exports go to the European Union, and the European crisis is likely to impact upon non-eurozone demand for US goods and services.

Key Industry Data

* At the port of Los Angeles (LA) we forecast 4.8% year-on-year (y-o-y) growth in total tonnage in 2012, to reach 66.7mn tonnes.
* At the East Coast port of New York/New Jersey (NY/NJ), growth is forecast to be 3.9% y-o-y in 2012, to reach 145.4mn tonnes.
* We expect LA to record growth of 2.6% in twenty-foot equivalent unit (TEU) throughput in 2012 to reach 8mn TEUs.
* We expect NY/NJ to record a 3.2% increase in TEU throughput in 2012, to reach 5.7mn TEUs.

Key Industry Trends

Competition For Virginia Ports Heats Up

BMI is unsurprised by the competition that APM Terminals (APMT) is facing in its bid to take over the operation of the Virginia Port Authority (VPA)'s facilities. The Virginia ports have potential for serious expansion in their annual throughput, especially the Port of Norfolk. The port has already posted strong growth figures for the year so far, exceeding real GDP growth in the US. We note, however, that given its international terminals-operating experience, and the potential it has to bring in major container shipping services, APMT might be the best firm for the job.

Charleston To Outstrip US Rivals

The Port of Charleston, on the US's East Coast, is, according to BMI's projections, set to secure stronger growth in 2012 than any of the other US facilities for which we forecast container throughput. With the funds for its dredging works now guaranteed we believe that the facility will continue to enjoy strong growth over both the medium and the long term, as it seeks to benefit from the throughput increases at East Coast and Gulf ports following the completion of the Panama Canal expansion.

Crane Buy For Long Beach's Future

BMI believes that the new Middle Harbour terminal to be developed at the US West Coast port of Long Beach will provide upside potential to the port's long-term container throughput prospects. The terminal is being developed by Orient Overseas Container Line (OOCL), the shipping and container terminaloperating subsidiary of Orient Overseas International. The recently announced purchase of equipment for the terminal, the largest ever crane buy in the US, affirms the company's commitment to making the terminal a success and the Port of Long Beach a force to be reckoned with once again.

Risks To Outlook

The US economic recovery remains slow; BMI expects average annual GDP growth of 2.5% to 2021. Further downside is presented by the expected slowdown in Chinese economic growth, which will damage demand from the US's biggest export market. The eurozone is unlikely to be able to pick up the slack, due to the ongoing crisis there. BMI believes the main risks to our outlook for US container shipping are on the downside. A bearish consumer outlook, combined with the withdrawal of shipping lines from the transpacific route and cuts to federal funding for port projects mean that growth in the box shipping sector could be slower than expected.

Upside potential is presented to east coast ports by the expansion of the Panama Canal, due for completion in 2015. The project will allow post-Panamax vessels to pass through the Panama Canal to call at east coast ports, bypassing the traditional US hubs of LA and Long Beach.

On the dry bulk side there is upside potential from the fact that we expect the US to become a net exporter of coal over the medium term as domestic demand slows and Asian demand remains strong. We are already seeing the development of new port facilities on the west coast, such as SSA Marine's Gateway Terminal, in order to cater for an expected increase in coal shipments.

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