Trumpeting year-on-year growth an annoying practice this time around
Forget about 2009 when looking at port throughput figures – those percentages are out of context and irrelevant.
Ports and terminal operators across China are showing some impressive year-on-year container throughput growth for January. The problem is that in January last year the container throughput arrow at the ports in question was heading in the same direction as a downhill skier in Vancouver, only faster.
This renders any comparison – against skiing and last January’s figures – greatly flattering and completely meaningless, other than for a dodgy CEO to dazzle his ignorant board of directors.
The percentages may show that business is improving, but only a complete lunatic, or a board member, would believe that business is recovering in such a robust way.
Two examples will illustrate this point. The first is a terminal operator with facilities across China.
Cosco Pacific is the terminal operating unit of the mainland’s biggest shipping outfit, China Ocean Shipping Company. So let’s compare Cosco Pacific’s January throughput to that of January 2009 and January 2008 (figures for China terminals only).
In January 2008, Cosco Pacific handled 3.4 million TEUs. It was the last year of the good times when exports were still cascading out of China and represented a healthy double-digit increase.
Then came the great global financial trade meltdown horror crash panic and throughput began to slide. Containers handled in January 2009 at its terminals dropped to 2.8 million TEUs, down a shocking 17.6 percent.
Roll on to this year, and January saw 3.3 million TEUs crossing the Cosco wharves, 15 percent up year-on-year.
But as you can see, the large increase over last year still leaves the terminal operator handling fewer boxes than in January 2008.
For an even more extreme second example, look no further than the January throughput of Hong Kong port in the last three years.
In January 2008, the port handled 2.11 million TEUs. In 2009, that had dropped 23.6 percent to 1.61 million boxes, and this January 1.88 million TEUs were recorded, 17.1 percent up year-on-year.
But comparing Hong Kong’s year-on-year figures generates some jaw-dropping numbers: The main container terminals in the city showed an implausible 35.6 percent growth with transshipment and river trade growing by an incredible 54 percent.
The year 2008 is a far better benchmark if you need to make comparisons and will inject some reality to your budgetary planning. It reveals that Hong Kong was still 10 percent down in throughput in January, which is far more likely considering the steady migration of volumes to Shenzhen.
This game is being played out at ports and container terminals across Asia, but don’t be fooled by the year-on-year percentages. For a more accurate picture you have to look back further than that.