Several international shipping companies do not predict a double-dip for the US economy but do expect slow and steady growth for the foreseeable future. The world’s largest shipping companies convened yesterday at the Jefferies 7th Global Shipping and Logistics Conference in New York City.
The shipping companies were the first in line to experience the beginning of the financial crisis with a sharp drop in demand for durable goods, oil and gas products and dry bulk in 2008-2009.
Because of the reduction in demand for large container ships and tankers, most shipping companies decided to park some of their fleet right off the coast of Singapore, which looked like one large parking lot of idle ships for all of 2009.
One company, Seaspan, decided to weather the storm differently and slowed down the speed of its fleet of 68 container ships thereby reducing fuel cost but still being able to continue full service for its customers at a slower pace.
Mr. Sai W. Chu, Chief Financial Officer of Seaspan, confirmed that third quarter container volume had picked up but that such was primarily due to early shipping orders for the holiday season and he attributes the higher volume to restocking rather than higher demands for goods in the US and Europe.
This year, most shipping companies experience a return to the pre financial crisis in both volume and margins even though they are careful not to become too optimistic just yet.
Teekay’s executive, Peter Evensen, confirmed that shipping demand has increased primarily in China and Asia but that the demand from the OECD countries remains flat.
The company specializes in oil, gasoline, LNG and fuel transports and also engages in floating storage and offloading (FSO), a highly specialized market that complements its revenue stream.
Both companies join shipping giants like Maersk and Cosco in their assessment that the demand for imports and exports is increasing but are careful in their predictions for the immediate future.
Neither one of the companies believes that the US faces the possibility of a double-dip but caution that growth in the developed countries will be slow but steady nevertheless.
Container or bulk volumes are always a good barometer of the health of consumer spending driven economies as well as the future of international trade whether such pertains to oil products, manufactured goods or commodities.
Written by Nick Doms © 2010, all rights reserved.
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