Genova - At the beginning of 2019, BIMCO, has published an overview of the year that awaits global shipping, in the dry and liquid cargo and container sectors. To one of the authors of those “Reflections”, Peter Sand, BIMCO’s chief shipping analyst, we asked for a focus on the prospects of maritime transport in Europe and in Italy.
European port traffic is concentrated above all in Northern European ports, which operators consider more efficient. Can there be a rebalancing of container traffic to the ports of southern Europe?
“Such a rebalancing would rely on growing imports to the ‘local MED port countries’. It’s unlikely that South European ports will gain much from the current logistical chains. Congestion on roads and rail are amongst the factors that come into play. Moreover, seaborne transportation is a very efficient and cost-effective way of moving large amounts of cargo within the proximity of the end consumer. A rebalancing doesn’t seem to be in the cards for the nearest future”.
“Any protectionism is outright bad for shipping. An industry that feeds on globalisation is bound to be hurt by trade restrictive measure being introduced at faster and faster pace. Most business into Europe and Italy is not directly affected by the Trade War, as neither is party to the official trade war. But imports into Europe, North and South have been growing only at tepid pace in 2018. This is worrying to an industry that relies massively on reaping economies of scale, setting up trade lanes by using hub-and-spoke strategies and depending widely on volume growth on the already massive East-West trades. For 2019, IMF expects the Italian GDP and imports of goods to grow at a lower pace than in 2018 and 2017. This also spill-over into fronthaul activity and is likely to keep a lid on how much the market will improve on the back of the otherwise relatively slow container shipping fleet growth around 3-3.5%”.
How will the decision of the European Commission on alliances affect the shipbuilding industry?
“It remains to be seen ...”
The international bulk market is particularly influenced by what is happening in China and the United States, as underlined by the “Reflections 2019” by BIMCO. What are the conditions in Europe, in the Mediterranean and in Italy and the prospects for 2019? “Surely there are differences from one trade lane to the next. But the overall market is still global – when freight rates are set. It remains the global market balance that set the tone – also for more regional trade. In the case of sudden local changes, rates may spike for a few days or weeks until, the new balance is set – either by more ships coming into the local market, or due to cooling demand. Putting Europe into a global perspective – it is very stable on the level of dry bulk imports. Peaking more than a decade ago, settled down at a lower level after the 2008-crisis. Today European exports matters much more, grains out of Black Sea and out of Med are amongst the most volatile markets”.
The United States and Europe are divided on the attitude to be taken towards Iran. How will the sanctions adopted by the United States influence the European oil transport market?
“The sanctions have already impacted the market in 2018, as many of the European importers are global players. Players that have operations and business in the US too. Many of them have chosen to follow the US. EU Commission is working on a way to operate individually of the US dollar going forward, by setting of a system that supports oil trading in EUR. But that did not materialise as quickly as expected. Maybe next time around will be different – only time AND geo-politics will tell”.