Executive Briefings

So Ends the 'New Year Lull'-Ships Moving from Asia to the U.S. Are Full Again, Says TSA

Containerized cargo volumes moving by sea from Asia to the U.S. have rebounded on all major lanes, following Asia's week-long New Year festivities, according to the Transpacific Stabilization Agreement (TSA). By the first half of March, ship utilization had climbed to more than 90 percent on most sailings. The figures were 91 percent for local and intermodal containers offloading at California ports, and 94 percent for ships moving to the U.S. East Coast via the Panama Canal. Even in February, in the weeks prior to Lunar New Year factory closures in Asia, utilization factors were hovering in the 95- to 100-percent range, TSA said. So much for the traditional "slack season" of the year. Based on current trends and forward bookings, TSA predicted a further increase in container traffic through April. Following an expected lull in early May, due to national holidays in China and Japan, volumes will rise again, leading to "another record peak season," the carriers' group said. The surge will require the additional capacity that is slated to enter the trade, it added, refuting by implication any claims that 2007 will see overcapacity in the eastbound trans-Pacific trades. TSA chairman Ronald D. Widdows brushed aside worries over the economy, saying that strong demand for ship space is "largely consistent with recent economic data trends in the U.S." Positive indicators include 4.4-percent unemployment, rising wages, inflation below 3 percent, a steady rise in consumer spending and household disposable incomes, and strong retail sales. The first quarter of 2007 saw slower growth in U.S. gross domestic product, Widdows acknowledged, but the continued shift of manufacturing to Asia has only intensified the flow of goods into the U.S. The 12 container lines that make up TSA are forecasting growth of between 9 and 10 percent in Asia-U.S. cargoes for 2007, and slightly higher in 2008.

Visit www.tsacarriers.org.

Containerized cargo volumes moving by sea from Asia to the U.S. have rebounded on all major lanes, following Asia's week-long New Year festivities, according to the Transpacific Stabilization Agreement (TSA). By the first half of March, ship utilization had climbed to more than 90 percent on most sailings. The figures were 91 percent for local and intermodal containers offloading at California ports, and 94 percent for ships moving to the U.S. East Coast via the Panama Canal. Even in February, in the weeks prior to Lunar New Year factory closures in Asia, utilization factors were hovering in the 95- to 100-percent range, TSA said. So much for the traditional "slack season" of the year. Based on current trends and forward bookings, TSA predicted a further increase in container traffic through April. Following an expected lull in early May, due to national holidays in China and Japan, volumes will rise again, leading to "another record peak season," the carriers' group said. The surge will require the additional capacity that is slated to enter the trade, it added, refuting by implication any claims that 2007 will see overcapacity in the eastbound trans-Pacific trades. TSA chairman Ronald D. Widdows brushed aside worries over the economy, saying that strong demand for ship space is "largely consistent with recent economic data trends in the U.S." Positive indicators include 4.4-percent unemployment, rising wages, inflation below 3 percent, a steady rise in consumer spending and household disposable incomes, and strong retail sales. The first quarter of 2007 saw slower growth in U.S. gross domestic product, Widdows acknowledged, but the continued shift of manufacturing to Asia has only intensified the flow of goods into the U.S. The 12 container lines that make up TSA are forecasting growth of between 9 and 10 percent in Asia-U.S. cargoes for 2007, and slightly higher in 2008.

Visit www.tsacarriers.org.