Shanghai International Shipping Institute recently released the Global Port Development Report of Q1 2019. According to the report, the global economy exhibited an evident downward trend in Q1, with weak growth in major economies, continued depression in international trade and investment, sluggish manufacturing performance and declines in multiple economic and trade indicators. The International Monetary Fund (IMF) tuned down again the yearly economic growth projection to 3.3% in its global economic prospect report released in April. The production at major ports around the globe slowed down growth amid the feeble economic and trade growth.
In Q1, major ports in the world recorded a year-on-year growth rate of 2.7% in throughput, lower than that in the same period of last year. The container throughput growth was mere 3.9% year-on-year, 2.7 percentage points lower than that of last year. The global ports also witnessed slack growth for bulks, with the growth rates of major iron ore and coal ports on a nose-dive. In the meantime, global liquid bulk ports presented polarization, with China's oil product throughput continuing to rise on a high level, against the underperformed oil product throughputs at major ports in Singapore, South Korea, etc. Among global terminal operators, COSCO Shipping Ports, China Merchants Port and others also underperformed the same period of last year in terms of business performance. Except DP World which suffered a decline, all other terminal operators managed to sustain low-rate growth.
Specifically, global port production in Q1 2019 presented several major highlights as follows:
Ø Inland river ports in China post robust growth
In Q1, China maintained stable economic operation, with its GDP growing by 6.4% year-on-year. China's ports above a designated scale handled 3.15 billion t of cargoes, a rise of 6.6% year-on-year. Specifically, the throughput of inland river ports in China soared by 15.4%, a pillar driver of the stable growth of China's port production. The construction of the 12.5-meter deep-water channel of Yangtze River in the downstream of Nanjing greatly boosted the capacity in the section, as evidenced by the rising arrivals of 100,000-DWT to 200,000-DWT ships at ports along the river. Zhenjiang, Nantong, Wuxi and other ports along the river also welcomed soaring cargoes with their throughput growth staying above 10%. On the other hand, the Sino-US trade war was intensified. China's foreign trade was overshadowed, recording around 7 trillion yuan of import and export values in Q1, a slower growth rate of 3.7% year-on-year. Specifically, the import value growth was mere 0.3%, and the foreign trade throughput growth of ports also slowed down dramatically.
Data source: MOT
Ø Southeast Asia ports enjoy brisk shipping activities
Major economies in Southeast Asia enjoyed stable economic growth overall, with relatively brisk port activities. Throughput-wise, ports in the Philippines handled a total of 59.28 million t of cargoes, a rise of 6.4% year-on-year, primarily as a result of the enhanced economic and trade ties between China and the Philippines. In Q1, fruits export from the Philippines to China delivered eye-catching performance, making China, surpassing Japan, the biggest fruit importer from the Philippines, as nearly 40% of fruits are exported to China according to statistics. Low-value-added dry bulks and other cargoes are shifting to ports around Singapore, leading to the throughput decline at Port of Singapore, namely to 150 million t in this quarter, down by 2.6%.
Ø Hong Kong Port of China sees declining container throughput
In Q1, Hong Kong GDP grew by 0.5%, a seven-year low. Besides, the Sino-US trade war compromised the orders from the US buyers in the new season, hurting the import and export trade at Hong Kong Port, dragging down the import and export values at the port by 4.6% and 4.2%, respectively. The container throughput of Hong Kong Port slumped by 9.2% year-on-year to 4.44 million TEUs. Hong Kong Port has been at a disadvantage in the competition with nearby ports in recent years because of its high production cost. Adding to that the Sino-US trade war, Hong Kong Port has suffered declines in container throughput. The port's global ranking in 2018 by container throughput has fallen behind Guangzhou Port and Port of Busan to the 7th place. In Q1, the further drop of Hong Kong Port container throughput led to another slide - Hong Kong Port was overtaken by Qingdao Port to become the 8th.
Ø Growth of North America container ports declines
In Q1, the container throughput of major ports in North America in Q1 dropped by 3.4% year-on-year. Two reasons are behind this. First, the US economic growth has topped out and begins to slow down dramatically. Canada's pillar industries also saw growth downturn, which has impaired the container trade in North America. Second, the tariff policies in the Sino-US trade war intensified the market panic, and the "advance shipment" out of concerns of aggravated situations overdrew the cargo shipping capacity, leading to the sluggish container growth in Q1 2019.
Ø Dry bulks production in Australia ports slumps
In Q1, Australia saw its economic growth significantly slowed down with its throughputs at major dry bulks ports falling to varied degrees subject to the depression of international dry bulks market and bad weather among other reasons. Specifically, the hurricanes forced the Port of Hedland to close business for 92.5 hours in March 2019, slashing the port's iron ore throughput for that month by 14% year-on-year to 36.7 million t. On the other hand, some coal products in Australia failed to meet environmental requirements, prolonging the customs clearance processes for Australia-imported coal in various countries. China even turned to Russia, Indonesia for coal imports, and the throughputs of Port of Hay Point and other major coal ports in Australia plunged.
Table 3 Dry Bulks Throughputs of Major Ports in the World in Q1 2019
Data source: official websites of various ports, prepared by the SISI
Ø Growth of liquid bulks throughput in Europe declines
In Q1, the crude oil demand in Europe was sluggish. Crude oil consumption in Germany, France, Italy, the Netherlands, the United Kingdom and other countries has declined to varied degrees since the end of 2018. The liquid bulks throughputs at Port of Antwerp and Port of Barcelona also dropped, with the latter posting a steep fall of 12.5%, and the former sliding by 8.6% year-on-year to 16.96 million t. The Port of Rotterdam, however, welcomed rapid growth of 4.7% with a total liquid bulks throughput of 58.51 million t, primarily as a result of the increased shale oil imports from the US.
Table 4 Liquid Bulks Throughputs of Major Ports in the World in Q1 2019
Ø Major terminal operators in the world slow down production
In Q1, COSCO Shipping Ports, China Merchants Port and other major terminal operators in the world saw slowdown in production year-on-year. Except DP World which saw negative growth in throughput, all other terminal operators managed to sustain low-rate growth. Specifically, COSCO Shipping Ports posted a container throughput of 28.73 million TEUs (counted in Qingdao Port International), a rise of 5.62% year-on-year, and an equity throughput of 9.28 million TEUs, a rise of 7.7% year-on-year. China Merchants Port handled 26.39 million TEUs of containers, a rise of 3.3% year-on-year, and recorded an equity throughput of 9.93 million TEUs, a rise of 3.7% year-on-year, continuing the growth slowdown since Q2 2018.
In addition, various terminal operators continue to explore the extension of supply chain logistic services beside their main businesses of handling operations, to further widen service scopes and improve service quality and values. They launched multimodal transport and commerce and trade information businesses through acquisitions and collaboration among other means.