‘This is the year of opportunities for the shipping industry’

Container tonnage rose to over 9 per cent in 2011 whereas container traffic grew about 8 per cent, which is well above the global average though still falling short of the estimated projection of over 10 per cent. This complements well with the country's GDP growth of about 7 per cent, making India number 2 behind China whose GDP grew by 9.2 per cent for the full year 2011, down from 10.4 per cent the year before.

While in the first half of 2011, exports grew more than expected, the second half saw moderate growth, which sputtered due to drying export orders from the US and Europe, India’s largest export markets.

Overall, global markets remained challenging in 2011, which was marked by lack of stability and volatility. A quick glance at the monthly growth in exports in 2011:

January — 32.4 per cent
February — 49.8 per cent
March — 43.8 per cent
April — 34.4 per cent
May — 57 per cent
June — 35.1 per cent
July — 49.8 per cent
August — 81.8 per cent
September — 44.3 per cent
October — 10.8 per cent
November — 3.2 per cent
December — 6.7 per cent

The performance was better in the earlier months due to Indian exporters diversifying to markets other than the US and Europe. Hence, the sudden enormous growth percentage. One of the reasons for the slackening of exports in the second half was low orders from the traditional markets.

However, with new markets opening up, these markets will get accustomed to Indian goods in due course and, subsequently, may or may not guarantee continuous orders as it takes time for the newer markets to develop. But over the long run, the new avenues will strengthen as orders increase and Indian exporters will start depending less on the traditional markets. The sooner it happens the better it is for Indian exports.

It must be said here that the US still remains a potent export market for the Indian trade, especially now that its economy is gradually showing signs of recovery.

a) Industrial output, which slumped to 1.9 per cent in September, the lowest in a decade.
b) High interest rates preventing borrowing.
c) High interest rates also leading to reduced domestic demand, a problem being faced by other Asian economies as well, including China.
d) During the 2008 recession, crude prices tanked to the level of $ 40/barrel, which actually favoured India. Now, with the price at over $ 100 a barrel, and not showing any signs of coming down, it will further impact the fortunes of the country's automobile sector which has already seen significant fall in sales, especially during the festive season. The hike in local prices has added to the woes.
e) The strengthening of the dollar against the euro is causing concern to investors the world over.
f) The weakening of the rupee is also not a good sign unlike in 2008.

It will be worthwhile here to analyse container trade growth in India compared to global trade.

• Current projection shows that global container trade will grow by 8.1 per cent this year.

• Main lane trade growth projection is just 4.2 per cent.

• This reflects little to no expansion in trade from Asia to the US and only moderate growth in trade from Asia to Europe.

• Non-main lane trade is projected to grow by 9.8 per cent this year, i.e. growth in trades to and from developing economies.

• The container fleet is currently projected to grow by 7.3 per cent this year, leaving global boxship supply and demand growth for the full year in relative balance.

• Fleet growth has been much more rapid in the larger size segments: The 8,000+ TEU fleet has grown by 23 per cent in capacity since January, leading to plummeting main lane freight rates, although supply reductions have had little impact on main lane freight rates. It has instead put pressure on non-main lane freight and charter rates.

• Container traffic to and from other parts of Asia is expected to grow more rapidly than the world average.

• Expansion is expected to be particularly rapid in China, continuing the trend of the last five years, and solid growth is expected in South Asia.

• South-East Asia is also expected to increase its share of world container traffic over the forecast period.

• Taken together, Asia's share of containerised exports is expected to rise from 55 per cent of the world total in 2002 to 64 per cent in 2015; the share of containerised imports is expected to rise from 46 per cent to 53 per cent.

• US container trade grew 3.7 per cent in 2011, a sharp slowdown from the double-digits the year before.

• Exports up 5.8 per cent, Asian imports almost flat.

• Containerised imports grew only 2.2 per cent in 2011 over the year before, and most of that growth came early in the ye