europe: economic outlook and impact on ports & shipping · • envisaged scenario 3 impact on...
TRANSCRIPT
Europe: Economic Outlook and
Impact on Ports & Shipping
Varna: May 30, 2013
ESPO 2013 Conference
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Agenda
Discussion Agenda Coverage
1 Economic Outlook: Europe • Historic review
• Regional patterns
2 Vessels & deployment • Visible shifts
• Envisaged scenario
3 Impact on Ports & Shipping • Likely vessel redeployment
• Changing role of ports
4 What could the Future look
like?
• Shipping services
• Port operating models
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Overview of Global Port Market
China & HK31%
Other NE Asia9%
SE Asia14%
ISC3%
Mid East6%
Oceania2%
N Europe10%
S Europe6%
N Am8%
C&S Am7%
Africa4%
China & HK17%
Other NE Asia14%
SE Asia15%
ISC2%
Mid East5%
Oceania2%
N Europe14%
S Europe8%
N Am14%
C&S Am6%
Africa3%
GLOBAL PORT CONTAINER
THROUGHPUT
Note: * preliminary estimate
Source: ICF GHK based on
Alphaliner
240M TEU in
2000
630M TEU in
2012*
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Global Port Market – Key Growth Regions
0%
3%
6%
9%
12%
15%
Ch
ina
& H
K
Afr
ica
S A
sia
Mid
dle
Ea
st
C+
S A
me
rica
SE
Asia
Oce
an
ia
S E
uro
pe
N E
uro
pe
Oth
er
NE
Asia
N A
meri
ca
CAGR 02-12
0%
3%
6%
9%
12%
C+
S A
me
rica
Ch
ina
& H
K
Afr
ica
Mid
dle
Ea
st
SE
Asia
Oth
er
NE
Asia
S E
uro
pe
S A
sia
N E
uro
pe
Oce
an
ia
N A
meri
ca
CAGR 10-12
In the last
decade
Last three
years
Source: ICF GHK based on Containerisation International and Alphaliner
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Trends in Regional Economic Growth
Source: IMF Database
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14% Trends in GDP Growth
World Europe US Developing Asia Latin America Sub Saharan Africa
2010 – 2013: Marginal US recovery, continuing European woes
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Container volumes are recovering…
0
100
200
300
400
500
600
700
Mil
lio
n T
EU
s
Global Container Throughput
Oceania
Africa
C + S America
N America
S Europe
N Europe
S Asia
Middle East
SE Asia
Other NE Asia
China + HKG
Source: Alphaliner
Europe accounting for more than
16% of global container port
throughput – Container throughput
growing at 5.8% CAGR 2000-12
-
50
100
150
200
250
300
350
400 Indexed Growth 2000-12
World
Asia/ Middle East
Europe
North America
South America
Africa
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Global Container Trade
52.7
8.51.5
1.3
4.2
4.2
3.34.5
6.2
13.96.1
14.0
7.4
Global Container Trade in 2011 (million TEU)
Source: ICF GHK research & estimate based on PIERS, CTS, IADA, CI online, Drewry,
Alphaliner and shipping lines and port operators data.
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Europe’s Key Trading Partners (2011)
Source: Eurostat
Asia and America dominating the trade…
Europe
Area
China
12.9 Mn
TEUs
US
5.2 Mn TEUs
Russia
2.6 Mn
TEUs
Brazil
1.8 Mn
TEUs
India
1.3 Mn
TEUs
Canada
1.4 Mn
TEUs
South Africa
1.3 Mn TEUs
Japan
1.1 Mn
TEUs
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European Economy: Uncertainty continues…
-6%
-4%
-2%
0%
2%
4%
6%
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
GDP growth – Europe Region
0%
2%
4%
6%
8%
10%
12%
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
Inflation (%)
0%
20%
40%
60%
80%
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
Government Net Debt (% of GDP)
Highly fluctuating growth over the last 4-5 years
Source: IMF Database
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Trends in European Trade: Correlation to GDP
Source: Eurostat
10,000
10,500
11,000
11,500
12,000
12,500
13,000
13,500
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
GD
P @
cu
rre
nt
pri
ce
s in
EU
R B
n
EU
R B
n
European International Trade
Exports Imports GDP at current prices
Trade is highly correlated to
GDP growth – Correlation of
0.92 over the period 2005-12
Rapid decline in both imports
and exports recorded in 2009,
following Global Financial
Crisis (GFC) was completely
reversed post 2009. Both
exports and imports have
reached record levels in 2012,
summing to more than EUR
3.5 Trillion
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Europe Economic Outlook: Revival expected…
1.3% 1.7% 1.8% 1.9% 2.0%
0.0%
1.0%
2.0%
3.0%
2014 2015 2016 2017 2018
GDP growth projections
0%
1%
2%
3%
4%
5%
6%
2014 2015 2016 2017 2018
Export & Import growth projections*
Imports
Exports
Source: IMF Economic Outlook, April 2013
* Excludes UK whose exports are expected to outperform rest of Europe
while import growth is expected to be inline with rest of Europe
GDP Growth expected to
bounce back to 2% by the
year 2018 – But to remain
below the pre-crisis levels
Initially imports to grow
slower as compared to
exports – Due to reduced
consumption post crisis
However, as economy
recovers, imports to catch
up with exports by the
year 2017
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Tradelanes to/from Europe: (1) Large Vessels
Liner Units TEU Capacity Avg. Vessel Size
Eur‐N. Am 154 624,890 4,058
FE‐N. Am 477 2,835,028 5,943
FE‐Eur 405 3,931,157 9,707
ME/ISC related 526 1,901,058 3,614
Africa related 535 1,357,051 2,537
Lat Am related 659 2,177,473 3,304
Oceania relared 229 647,218 2,826
Intra‐FE 1,463 1,683,118 1,150
Intra‐Europe 615 795,536 1,294
Other/Unassigned 106 228,626 2,157
Idle 263 699,072 2,658
Total 5432 16,880,227 3,108
Source: Alphaliner
Vessel deployment as on May 1, 2013 Tradelanes to/ from
Europe are served by
relatively larger sized
vessels
Far East – Europe
tradelane has
maximum capacity
allocation with largest
vessel size
Larger vessels being
forced into other
trades
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Tradelanes to/from Europe: (2) Lower Utilization
Source: Alphaliner
Falling utilization owing to surplus capacity and weak demand…
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Tradelanes to/from Europe: (3) Depressed Rates
Source: Alphaliner
Rates on a
downward
spiral – Failed
GRI Attempts
Depressed
rates a result
of weak
demand and
difficult
capacity
management
“capacity
overhang”
from previous
orders
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Source: JOC / company Websites
Global Liner reactions – Historic Perspective
Early 90’s single companies, growing
First smaller acquisitions (for example Ben Line EAC by Maersk)
First regional - global VSA agreements
– P&O and Maersk
– SeaLand & Maersk
– P&O and Nedlloyd
Mergers, CMA CGM, MaerskSealand, followed later by PONedlloyd
Regional or niche acquisitions
– Safmarine, ANL, Delmas
Larger vessels, economies of scale drive more global VSA
agreements such as New World Alliance or
Even larger cooperations – G6 alliance 2012
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Rates around 6-700 USD/TEU
apparently are getting close to
generating negative cashflow for
liners.
Then it becomes more attractive to
lay-up ships – Trickle effect is of
course that capacity is diminished,
improving the supply/demand to
restore rates and profitability
Current spot rates trending down?
Correlation between Freight rates & Idle fleet?
Source: Alphaliner / SCFI ICF GHK
Idle containerships by size
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Slow steaming now on most longer sailing
legs on major trades
− absorb capacity in an over supply
situation
− reduce bunker expenses
− but it’s a one-off: “slow steaming is here
to stay”
The drive for market share to achieve decent
utilization continues to undermine rates &
profitability
Continued drive for cost reductions
New vessels offer lower opex costs (and
better environmental performance)
New & larger vsa agreements
Next steps?
Global Liner reactions
Source: JOC / Maersk
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Fuel Efficiency
Bunker can constitute as much as 50-60% of ship operating cost.
10,000TEU vessels ordered 6-7 years ago burn 110t per day slow
steaming.
New generation of 10,000TEU vessels burn 65-70t per day.
Cautious about a new vessel that does not have an option for switching to
LNG.
Energy efficiency not only for fuel saving, but also for possible future
carbon trading (huge “transaction”).
Source: ICF GHK/HSBC
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Hamburg - HHLA
direct involvement in rail services to large
part of the hinterland
own trucking services
network of inland depots
Rotterdam – ECT
large inland depot network (focus on barges
and rail connectivity)
Cargo acceptance at the depots
Direct investments
Operational involvement
no rail investments (but service
agreements)
Port Strategy – reaching into the hinterland….
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Port Strategy – reaching into the hinterland, but….
Does it make sense for each Operator or Port to get its own network
established – Carrier terminals?
Environmental regulations will force a model shift through penalties or
transparent pricing
Increased complexity of rail connections in the Ports, who will take charge?
A real Pan-European Rail, but what about:
− Safety regulations
− Frequencies / electricity / gauges
− Language
Long term preparations for double stack?
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What could the future look like?
Likely redeployment of surplus capacity in short-term – However, demand
on other trade lanes also bearish
Long-term recovery in terms of utilization and charter rates – balance S&D
by 2015
Deployment flexibility in oversupply scenario – impact on transhipment
volumes until capacity supply more tight
Reduced empties with higher exports narrowing the import-export gap
Ongoing merger (not acquisition) activity
Automation & technologies in main ports, upgrades in Tier 2 ports for larger
vessels
Intermodal transport solutions to significantly impact port competitiveness
Ongoing pricing pressure on both the land & the sea side
Environmental & climate change
Shipping
Ports
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