"United States Shipping Report Q2 2011" is now available at Fast Market Research
PRLog (Press Release)– Apr 17, 2011– BMI's outlook for the US shipping sector in 2011 is cautiously optimistic. We expect volumes at major ports to continue recovering from the downturn as the consumer outlook brightens slightly. We expect to see continued investment in expansion and development in the port sector. This investment will be driven in some cases by rising Asian demand for US coal, which has highlighted the need for greater capacity at coal export facilities on both the east and west coast. The impending completion of the expansion of the Panama Canal will also be a major driver of investment, as east-coast ports rush to prepare for the arrival of Post-Panamax vessels in 2014, and the current west-coast hubs, LA and Long Beach, seek to minimise their losses. We note, however, that many new projects will either be privately funded, or in the form of public-private partnerships (PPPs). Obama's 2012 budget proposal reflected the fact that a large number of ports have been competing for a diminishing pool of state funds. As such, we believe PPPs will increasingly come to the fore as the most efficient way for US po chrysler rts to fund projects.
Headline Industry Data
* 2011 port of Los Angeles tonnage throughput forecast to rise 5.1% with annual average growth of 5.1% during our forecast period. * 2011 port of New York/New Jersey tonnage throughput forecast to rise 0.6% with annual average growth of 0.9% during our forecast period. * 2011 port of Houston tonnage throughput forecast to rise 4.3 with annual average growth of 4.8% during our forecast period. * 2011 port of Los Angeles 20-foot equivalent unit (TEU) throughput forecast to rise 3.3% with annual average growth of 3.6% during our forecast period. * 2011 port of New York/New Jersey TEU throughput forecast to rise 5.2% with annual average growth of 4.7% during our forecast period. * 2011 port of Houston TEU throughput forecast to rise 7.9% with annual audi average growth of 7.6% during our forecast period.
Key Industry Trends
Obama's Budget Proposal Buries East-Coast Dredging Hopes - BMI believes that east-coast ports campaigning for federal funding to pay for dredging projects are unlikely to succeed. President Obama's proposed 2012 budget offered little hope for ports that want to deepen their harbours to ensure they can receive the larger vessels that will pass through the Panama Canal when its US$5bn expansion is completed in 2014. Obama slashed US$913mn from the US Army Corps of Engineers' budget estimate for FY2012 - a 17% drop from the US$5.52bn allotted to the corps in 2010. The 2011 budget estimate is US$4.88bn, with the actual amount to be spent this year yet to be determined. Ports along the east coast looking to fund new deepening projects in time for the Panama Canal expansion in 2014 - Savannah, Charleston and Miami, for example - were disappointed but not surprised by the cut.
Miami Clings To Dredging Dream, State To Fund Shortfall - Miami Port Authority has welcomed the news that Florida State Governor Rick Scott plans cover a US$77mn shortfall in the port's ambitious dredging project. If the project is completed on time, it will put the port in a strong position to take advantage of increasing Post-Panamax traffic when the expansion of the Panama Canal is completed in 2014. BMI cautions, however, that the dredging process is long, as well as costly, and that Miami has already been overtaken by fellow east-coast ports New York/New Jersey and Norfolk
Imports Up At LA And Long Beach As US Consumers Splash The Cash - BMI believes that positive throughput figures for January released by the US ports of Los Angeles (LA) and Long Beach indicate the beginning of a reco aston martin very in US consumer sentiment. January marked the seventh straight month of retail sales gains in the US as consumers showed spending power beyond the Christmas season. This bodes well for the US box shipping sector, as growing consumer demand should translate into increasing imports of containerised goods.
Container imports at the ports of Los Angeles and Long Beach are continuing to grow in 2011. Imports at LA increased 15% year-on-year (y-o-y) to 338,607TEUs in January, with exports up 12.6% to 159,050TEUs for the month. Imports at Long Beach rose 11% y-o-y to 242,445TEUs, with exports up 12.7% to 127,546TEUs.
Peabody Bets On Asian Coal Demand - Peabody, the world's largest private-sector coal company, has agreed a deal with port operator SSA Marine to export up to 24mn tonnes of coal a year through the planned Gateway Pacific Terminal in north-west Washington State. According to SSA Marine, permit applications for the Gateway Pacific Terminal were filed this week with state and local authorities, as well as the US Army Corps of Engineers. The application lists a fair market value for the project of US$655mn. SSA hopes to have the terminal operational by 2015, with initial capacity for 25mn tonnes a year of coal, and the potential to expand capacity to 48mn tonnes a year. Under the deal, Peabody has rights to throughput over the life of the operation and could expand its capacity in future years. BMI notes that this terminal will dwarf the joint venture by Arch Coal and Ambre Energy in nearby Longview, Washington, which will have the capacity to export 5mn tonnes a year.
Risks To Outlook
Downside risks to our outlook present themselves in the form of a slower-than-expected recovery in US consumer demand. Our lacklustre outlook for the US economy, and in particular worries over high unemployment, could negatively affect consumer spending. In turn, this would have a negative effect on import levels.
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