Lower port throughput dampens hopes
Dashing hopes of an early recovery in exports, key mainland ports in Shanghai, Shenzhen and Zhejiang reported worsening throughput performances last month.
Shenzhen's container throughput fell 25.1 per cent year on year to 1.3 million 20-foot equivalent units (teu) last month, according to official figures.
This was worse than the 21.6 per cent year-on-year drop in March. Last month's throughput was 3 per cent lower than March.
Throughput at Shanghai, the world's second-busiest port, fell 20 per cent year on year to 2 million teu, Citi analyst Ally Ma estimated.
This was more than double Shanghai's 9 per cent year-on-year drop in container throughput in March. Shanghai's throughput last month was 8.3 per cent lower than March.
'April numbers show the recovery is still fragile,' Ms Ma said.
Sunny Ho Lap-kee, the executive director of the Hong Kong Shippers' Council, said Shenzhen's performance last month was below expectations.
'I was surprised to see Shenzhen's laden container throughput drop in April from March. I expected an increase,' Mr Ho said.
Shenzhen handled 930,000 laden containers last month, less than the 960,000 moved in March.
Normally, there is an increase in shipments just before the May 1 holiday from Shenzhen, but this did not happen this year, Mr Ho said.
'This can only be explained by very weak demand. The Hong Kong Shippers' Council has not seen any improvement in orders by overseas buyers. Manufacturers [in Hong Kong and Guangdong province] have not seen improvement in April in orders. Europe also has horrible demand,' he said.
In the first four months of this year, orders from Europe to Hong Kong and Guangdong manufacturers have dropped by 40 per cent, said Mr Ho.
United States rail cargo traffic, an indicator of US demand, has seen no improvement in recent weeks.
For the week ended May 2, total rail volume in the US was 27 billion tonne-miles, less than the total volume of 27.7 billion tonne-miles the previous week.
One other reason for last month's poor performance was a rush of shipments in March to avoid freight rate increases in April, Ms Ma said.
Shipping lines including OOCL and China Shipping Container Lines raised freight rates last month in a bid to stem losses and avoid bankruptcy.
Modern Terminals and Hutchison Port Holdings are the main port operators of Shenzhen and Hong Kong ports.
Modern Terminals has not cut staff or salaries in Hong Kong and Shenzhen in recent months, said a Modern Terminals spokesman.
HPH did not comment on whether it has cut staff, but a spokesman said it expected this year to be a challenging one.
