Macquarie Forecasts 'Benign' Peak Season

Global container volume will rise during the second half of this year but weak inventory restocking will produce a summer-fall peak season “unlikely to inspire” higher rates,

Macquarie Equities Research said in a report.
Macquarie forecasts year-over-year increases in global container volume of 6.6 percent in the third quarter and 9.8 percent in the fourth quarter. But said those numbers will be helped by soft comparisons with weak volume in the final months of 2011.
For the year, Macquirie’s “Counting Containers” report forecasts a global volume increase of 8.1 percent. The report previously had forecast a 7 to 8 percent increase for the year.
Volume was “fairly robust” in the second quarter, which is likely to set a record for global volume, but a “benign” pre-holiday shipping season is expected for the traditionally busy months of August through October.
“Given the considerable amount of overcapacity currently seen on some trade lanes — in particular Asia-Europe — we consider it unlikely that peak season volumes will be sufficient to stimulate a meaningful upturn in freight rates,” the report said.
Despite historically low inventory-sales ratios for U.S. retailers, Macquarie doesn’t expect a surge in restocking during the second half of the year.
“Contrary to the view of some industry observers, our analysis does not suggest that container volumes … will benefit from a meaningful increase in inventory levels,” the report said.
Macquarie said durable retail goods account for just 35 to 40 percent of U.S. containerized imports but manufacturers’ inventories remain “excessive” and U.S companies have already rebuilt stocks that bottomed out in September 2009.
The report also suggested with companies still maintaining tight supply chains, today’s low retail inventories may represent “an ongoing structural shift rather than transitory weakness”
The report cited Wal-Mart’s imposition early last year of a 3 percent penalty on suppliers whose products arrive at regional distribution centers outside a four-day delivery window.
Source: The Journal of Commerce