There can be little doubt that the international shipping industry – especially the containerised part of it which affects so many domestic haulage companies – has suffered a few rough years. The pandemic was one of the most difficult times for professionals in international shipping because there were often not enough workers at ports and logistical hubs to keep goods flowing around the world in 2020. Even after lockdowns were ended in many parts of the world, the lack of personnel and shipping containers in the right locations caused the industry significant amounts of disruption.
Soon after the trouble caused by the pandemic started to fall away, there were international tensions that caused shipping companies additional problems. Of course, the war between Russia and Ukraine – with the attendant rising cost of fuel for container vessels and trucks alike – pushed up the price of moving containers of all sizes from one part of the world to another. Military manoeuvring in the Far East, largely around the disputed island of Taiwan, also added to these shipping headaches. Overall, the container shipping industry has had a lot to contend with for two and half years, at least.
However, new data published by the Port of Valencia has encouraged many in the containerised shipping sector. Located in eastern Spain, this port has long been considered a bellwether in the shipping industry. In other words, what trends and practices are discernible there tend to be repeated soon afterwards in other European ports, particularly those in the Mediterranean. Recently published figures for August 2022 show remarkable improvements for the shipping industry in a number of areas. These are worth looking into a little more closely as they provide analytical data that is likely to help planning and investment in the containerised shipping industry in much of Europe and other locations around the world. Read on to find out more about the traffic indicators and other statistics recorded by officials at the Port of Valencia during the month of August.
Often regarded by international freight commentators as a barometer of the state of international trade, Valenciaport’s announcement about its terminals offered two distinct directions of travel. Compared to August 2021, the port’s owners recorded a drop in transhipment traffic. However, this was more than made up for by new highs in import container traffic. In addition, solid and liquid bulk cargoes as well as cruise passenger numbers saw a significant twelve-month rise. According to the Statistical Bulletin of the Port Authority of Valencia – the body responsible for measuring traffic through the port – during the month of August this year, Valenciaport set two milestones. Firstly, a total of 86,463 containers were unloaded at Valencia, indicating a big upturn in imports. To make that clear, this is a rise of over 21 per cent compared to the same month in 2021. There was also an upturn of around 10 per cent in the unloading of empty containers at the port. Although this is not indicative of import figures, it suggests that the containerised shipping sector is returning to something like pre-pandemic normality.
In related news, the Port of Valencia also said that it had seen the full recovery of its cruise tourism sector. The August figures noted the arrival of over 103,000 passengers. Perhaps of more significance to the haulage industry is that there was a recorded drop of over 5 per cent of outgoing containers year on year. Full containers (FCL shipments) saw the sharpest decrease, the ports figures stated. Nevertheless, the overall picture of container movements at the bellwether port was up – and up significantly – compared to the last few years.
It is also important to note that August was not an outlier when it comes to the increased movements of shipping containers in eastern Spain. According to the latest statistics, the rise in import containers being unloaded in Valencia can be just as easily evidenced by the cumulative number of those being handled throughout 2022 thus far. From January to August, for example, there was an increase of almost 10 per cent compared with the same eight-month period in 2021. That is not bad considering much of this year has been subject to geopolitical complexity, not least in the eastern Mediterranean which has been most impacted by the war being waged in the Black Sea. Given the problems international traders have faced with the increased risks the war in Ukraine has inevitably led to, there have been month-on-month – sometimes week-on-week – fluctuations in international trade.
These ups and downs, however, were evened out when the first eight months of 2022 have been viewed as a whole. To put this in a clearer, more statistical light, some 55.48 million tonnes of goods have been handled by workers at the Port of Valencia since the start of the year. Nevertheless, a note of caution should be sounded. Despite the encouraging figures on container movements at the port, the report made clear that movements of full TEUs – that is to say, standard 20-foot containers that are over six metres in length – saw a fall in 2022 so far. Although modest, a recorded drop of 6.23 per cent in FCL containers dedicated to cargo will raise eyebrows in the industry. Some commentators have already described the decrease in transhipment figures at the Port of Valencia as revealing that the port no longer provides the economy of scale that it once did. Given that more than only 80 per cent of its occupancy rate was being used during peak business days, some shippers have been looking at other, larger ports in the western Mediterranean for their containers. Like many other ports of its size, this could indicate that the Port of Valencia is now being increasingly regarded as too small, something that could indicate a wider trend toward more massive seaport investment.
Furthermore, there has recently been a move by shipping container companies themselves to provide greater economies of scale. Two of the four leading suppliers of insulated container boxes and refrigerated shipping containers – China International Marine Containers and Maersk Container Industry – had announced earlier in the year that they were preparing to merge with one another. However, this would have left the world exposed to very little competition in the sector had the plan gone ahead, something that notably raised the eyebrows of officials in the United States. The Department of Justice there announced an investigation into the proposed sale of Maersk Container Industry to the Chinese-backed firm. In August, it said that following their investigation, China International Marine Containers had decided to pull out of the deal. As such, the company’s attempt to control 90 per cent of the global refrigerated container market is now on hold, perhaps permanently.
Consequently, it seems that the push towards greater economies of scale at both container ports and the manufacturers of shipping containers may be something that does not continue as many have predicted in 2022 and beyond. At some point, the flexibility of mid-sized seaports, like Valencia, may be what the market is looking for, especially if the need for more agile shipments picks up compared to the current trend towards rock bottom pricing competitiveness. Indeed, this very fact may account for why the Port of Valencia has been seen as a lightning rod for the shipping industry over the course of the last couple of decades. With increasing potential for governmental interventions – as the Maersk takeover episode shows – the container shipping sector still needs to remain competitive and, above all, versatile in a rapidly changing world.
After all, few would have predicted in 2021 that there would be such sectorial differences in the figures for imports at the Port of Valencia. Back then – before Russia had invaded Ukraine – the steep rise in the imports of natural gas the port has seen in 2022 wouldn’t have been obvious. And yet, it is worth highlighting the traffic requirements of the energy sector in Valencia, notably with natural gas, would go up by as much as 160 per cent compared with the same period last year. In this sector alone, over 2,668,000 tonnes of natural gas imports have arrived in Spain this year so far, mostly from the USA, but also with significant contributions from Nigeria and Egypt. There again, imports of vehicles and transportation sector parts have also increased, albeit with a less significant margin.
Echoing the overall trend of increased import movements compared to export movements, container traffic in Valencia also saw an upturn in the agri-food industry. Movements of shipping containers with canned food produce rose by some 14 per cent while a similar figure was recorded by the animal feed and fodder sub-sector. Imports of containerised oils and fats also went up but by a slightly lower margin. Many international shipping professionals now expect to see similar figures from other Western European ports although, with post-Brexit trading arrangements still a factor, the pattern in the UK may prove to diverge from other countries in the region. That said, August’s figures for TEUs handled to and from the UK rose by 60 per cent compared to the same period in 2021, according to the Port of Valencia’s latest data.