Hard to break the cycle of gloom in the box business

Jun 10, 2010, 10:03PM EST
Even the stunning increase in container exports from China is not enough to get the party started.

The mood at the Transport Logistic show in Shanghai this week was not exactly upbeat, which seemed to be at odds with China's fast recovering exports.
In May, the mainland recorded a 50 percent increase in exports over the previous year, and even factoring in the weak numbers of 2009 it is still an incredible rebound.

Yet speaking to the container terminal operators at both ends of the supply chain – in Asia and in Europe and the US – they seemed to be stuck between gloomy and “cautiously optimistic”.

It is not difficult to see why. Container throughput at the big European gateways is reaching 2008 levels but the ports have basically lost almost two years of business. 2009 was a write-off year that would be forgotten if it didn’t cost so much.

Many of those ports still have staff working fewer hours or have cut dockside shifts.

Over in China, the ports are starting to pour out export containers. Volumes are fast approaching pre-crisis levels as shelves are restocked. The port of Shanghai, in fact, last month had its best ever throughput, according to vice-president Zhang Jiali.

He told me last night that for Shanghai, the boom times were back. But as with all the port operators I spoke to, optimistic statements were always offered with a caution. No one is ready to believe the current recovery is sustainable, even a port that is handling more boxes than ever before.

Once the peak season is over later this year the industry will have a better picture. If the volumes continue to rise, the word, “cautiously”, will no longer precede the word, “optimistic”.

Everyone is expecting the business to get back to pre-crisis levels, but no one is prepared to bet on when that will happen.

 
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