14 November 2008

Slower shipping in Singapore

Bad news for the economy, but relief for our shores?
Container throughput at PSA Singapore Terminals and Jurong Port grew 5 per cent in October from a year ago, down from 8.5 per cent in September. This is despite October being the start of the 'festive demand period', when shipments normally start picking up in anticipation of increased consumer spending ahead of Christmas. The global slowdown is expected to intensify in the coming months, and throughput is expected to move into negative territory by next year, or even next month.

Reefs right next to our container terminals include Labrador, Sentosa and Cyrene Reef.

Growth in container traffic slows
Throughput up only 5% in October despite run-up to Christmas
Fiona Chan, Business Times 14 Nov 08;
THE number of containers handled by Singapore's ports grew at a slower pace last month - yet another sign of the rough seas hitting these shores.

Container throughput at PSA Singapore Terminals and Jurong Port grew 5 per cent in October from a year ago, down from 8.5 per cent in September, according to the Maritime and Port Authority of Singapore (MPA) yesterday.

This slipping single-digit growth marks the end of the steady double-digit expansion seen last year and reflects the ailing state of global demand, economists said. Trade-dependent Singapore will suffer not only the direct effect of handling fewer containers but also the wider effects of weakening exports, they added.

As the global slowdown is expected to intensify in the coming months, they expect throughput to move into negative territory by next year, or even next month.

'We're getting a negative feedback loop from all the economies around the world. Spending is starting to slow, and it's starting to affect hiring and investment spending and new orders,' said Mr David Cohen of Action Economics.

He predicts a year-on-year fall in Singapore's throughput figures by the start of next year - the first drop in containers handled in the Republic since the 2001 slump, he said.

Last month's growth number is the smallest in more than two years, noted CIMB-GK economist Song Seng Wun.

This is despite October being the start of the 'festive demand period', when shipments normally start picking up in anticipation of increased consumer spending ahead of Christmas.

The weaker growth is consistent with the slowing export figures recently announced by China, Taiwan and South Korea, added Mr Song.

And next year is likely to be worse: 'With one economy after another downgrading growth and demand numbers, and some going into recession, next year does look like kind of a write-off.'

Container firms in Singapore and around the world are bracing themselves for tougher times as lower global demand prompts companies to cut shipments. Neptune Orient Lines, South-east Asia's largest container carrier, said last month it expects an operating loss in the fourth quarter, for the first time since 2000.

The world's biggest container line, AP Moeller-Maersk, has cut full-year sales forecasts, and expects profit to be at the lower end of a previously predicted range, because of a fall in shipping rates.

Singapore's ports handled 2.52 million 20-foot equivalent units last month, slightly down from 2.56 million TEUs in September, said MPA.

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