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PIERS predicts profits for container shippers

United States – US imports of manufactured goods are up for the first time in two years and expectations are that container shipping companies could even make profits in 2012, according to PIERS Trade Intelligence.

But despite the fourth quarter of 2011 closing 1.9% above the same period last year in terms of growth, the company’s economist Mario O. Moreno warns against complacency, adding that his outlook for this year remains ‘cautious’ and that much depends on the slowly recovering real estate market.

Meanwhile, Asia-Europe shipping rates are far below the break-even point, indicating that many shippers are moving cargo just to cut their losses, says fellow analyst Freddie Yam at Primasia. He observes that several shipping lines have already announced general rate increases but seriously doubts whether they will be effective due to the ‘persistent overcapacity and lack of discipline among shippers’.

At present, however, only 4% of capacity has been idled and so it won’t take much more improvement in shipping volumes for the rate hikes to stick, according to Mr Yam. He foresees a downside too: shipping stocks will carry a great risk should the prices fail.

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