After a steady diet of doom and gloom, is it possible that we are heading for positiveland?
The National Retail Federation believes retail cargo is back to normal and imports should reach their highest level in October as retailers stock up for the holiday season.
October has always been the historical peak season, although over the last few years the “peak” has been more of a low-grade incline than anything resembling an Alp (one Alp, many Alps).
This October, the NRF is predicting a 2.6 percent increase in retail cargo imports over the same month last year. August figures were seven percent down on 2010.
Comparisons with last year are tricky because shippers moved their cargo early to try to get around fears of capacity shortages in container shipping. The year turned out to be a record one, but the euphoria never lasted long. By the end of Q1 everyone was brought crashing back to Earth.
What we all forgot was that you don’t get over the world’s worst financial crisis in a year or two.
So it is with a healthy dose of skepticism that we treat statements saying things are “back to normal”. What is normal, anyway? Is it the way things were, because there is no getting back to the debt-funded profligate consumer spending of the past. Those days are gone forever.
There are way too many issues facing Europe and the US that still have to play out.
Take a look at the carriers. Alphaliner is predicting a US$600 million loss for the top 20 lines this year, a stunning turnaround from the highly profitable 2010.
PR News Service reports that there is some instability among the container line alliances as partners break ranks and enter into slot sharing deals with non-alliance members. That brings into question the purpose of the alliances in the first place, and their viability in the face of a sharp downturn in demand.
And downturns don’t come much sharper than the one we are currently in with export growth from China to the G3 markets having weakened significantly.
Yet such is the domestic demand in the mainland that HSBC still reckons the country will post a nine percent growth in GDP this year. Not bad in the current economic environment.
For container shipping, it would be uplifting to believe we are indeed in, or heading for, positive territory with trade ready to return to “normal” on the major east-west lanes.
But it doesn’t feel right for the same old tired and often repeated reason: Too much capacity, too little demand.