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With the European high season under way, the shipping industry is focused on demand from American importers

With the peak season for goods being shipped to Europe well under way, an increasingly pensive maritime trade transport industry this week turned its gaze to the United States, where purchasing power had yet to be flexed for the holidays.

The high-season rush of exports to the US is late in materialising, but carriers  said volumes remain strong and they are hoping for a longer peak period this year.

'To Europe we are already seeing a peak season rush. To the US, we are seeing lots of cargo, but it's not a peak as in previous years,' said Alfred Lo Wing-yat, the managing director of P&O Nedlloyd (Hong Kong).

'The peak may not be as pronounced as it has been in the past. But we think it will spread out over a longer period, perhaps through October. We don't know the exact reason.'

There are, however, plenty of theories. The loose alliance of carriers that informally sets freight rates for the transpacific trades gave their customers plenty of notice this year for the up to 40 per cent boost in transport charges.

Some executives  believe that led to peak season cargo being shipped before its time.

China's exports to the US, its biggest market, eclipsed US$400 billion in the first five months, up almost 34 per cent year on year.

Some of that may have been attributable to first-quarter stockpiling as US retailers hedged against the war in Iraq, with excesses weakening demand for south China products early in the peak season.

Lukewarm US consumer confidence indicators may also have importers taking a cautious, last-minute approach to Christmas ordering.

'I wouldn't be surprised if US stock levels are higher than usual,' said Eric Wong, general manager of marketing and sales  at P&O Nedlloyd (Hong Kong). 'But no one is panicking. If they were the freight rates to the US wouldn't be holding like they are. The rates are holding very well.'

Economic signals are certainly mixed, though. US inventories of manufactured non-durable goods, such as food and tobacco, reached US$169.7 billion in June, their highest level in more than a year.

But US stockpiles of manufactured durable goods, which comprise the majority of south China exports, in June declined for the 29th consecutive month to US$260.8 billion, according to the US Department of Commerce.

One Asia-based carrier executive said the US export growth numbers were weak because they were being compared against last year when there was a mad rush to beat the deadline for the US west coast port strike.

He said Sars had also disrupted buying patterns.

'We are going to see a short, sweet peak season. September is going to be busy,' he said. 'Everyone I have been talking to points to next month being busy.'

Not everyone shares that sentiment. Erik Bogh Christensen, managing director of Hong Kong's No2 terminal operator, Modern Terminals Ltd (MTL), predicted a mundane peak season.

'July should have been pretty busy, but overall the market was not. US importers appear to be pretty cautious, so the peak will probably be unexciting this year,' Mr Christensen said.

'The US economic numbers are steady; they're not down. They just need a little encouragement.'

MTL's volumes rose a comparative 6 per cent last month  to about 340,000 boxes. Full throughput for the main terminals has yet to be released but MTL is thought to have performed better than its port rivals due to its handling contract with Euro-centric carriers in the Grand Alliance.

CSX World Terminals, which relies more on the  US trade, saw volumes contract year on year last month, with initial  volumes for this month flat.

But there is still time for peak-season demand to mount in America, and carrier profitability will depend on their ability to hold the line on rates until it does. 'The rush in exports to the US has not started for us yet. But we expect to see volumes pick in about two weeks,' said Yaron Geiger,  marketing director (Asia)  of Zim Israel Navigation.  'Vessels are almost full [to the US]. The problem is 'almost full' makes some carriers act problematically.'

One port executive said it was possible there would be no peak season this year.  'My feeling is the peak will come late, and it will be relatively flat,' he said. The retailers are going to order later, and they will order less.'



Seasonal rush running late for peak summer exports to US