Port Report: Decline In Box Volumes And Containerized Cargo Weight In Bellwether Port Of Singapore

Asian city-state Singapore has seen a small fall in container volumes and a more noticeable fall in containerized cargo weights in the first half of 2019 when compared to the same period in 2018. Singapore is a bellwether for world trade volumes and it does a substantial amount of business with the U.S. as well.

Box volumes handled through Singapore, the world's second-busiest box port with a throughput of 36.6 million twenty foot equivalent units (TEU) last year, were essentially flat in the first half of 2019 compared to the first half of 2018.

Box volumes stood at 18,030,000 TEU in the first six months of 2019 and there was an average of about three million TEU handled a month. Earlier, in the first half of 2018, the port handled 18,021,000 TEU, which is a 0.05 percent decline between the two time periods. The average volume handled each month in the first six months of 2018 was also about three million TEU a month.

Total weight of containerized cargo falls

But it was a slightly more pronounced trend for the weight of containerized cargo. In the first half of 2019, the weight of containerized cargo was just over 183 million metric tonnes. One metric tonne is equivalent to 2,204.6 U.S. pounds.

By the end of the first half of 2019, the weight of containerized cargo at Singapore had fallen to 178,673,000 metric tonnes – a much more noticeable 2.5 percent decline.

FreightWaves sought comment from Singapore's Maritime and Port Authority, which has overall responsibility for the maritime sector in Singapore. FreightWaves also sought comment from the Singaporean container terminal operator, PSA.

Calls at port

Also noteworthy is that the number of containerships calling at Singapore fell between the two time periods as well. In the first half of 2018 there were 8,968 container ships that called at the Lion City. However, in the first half of 2019, that had fallen to 8,740 containerships, a 2.5 percent decline.

It is possible that a decline in the number of containerships calling at Singapore is not indicative of decreasing world trade volumes. And that's because the number of ships calling at Singapore has generally been declining since at least 2008 when the city-state attracted 20,589 ships. And that was in a year that saw one of the biggest global recessions in a long time. The numbers of ships calling at Singapore since then even picked up during and in the aftermath of the global financial crisis but the numbers of box ships calls have been generally trending downwards.

The reasons for the decline may be that containerships themselves are generally getting bigger. Singapore reports vessel arrivals by year and gross tonnage. It must be remembered that gross tonnage is NOT a measure of weight. It's a measure of volume. It measures all the enclosed space in an ocean-going ship. Back in 2008, containerships calling at Singapore had a total gross tonnage of 591 million gross tons. By 2018, the total gross tonnage of ships calling at Singapore was 881 million gross tons.

So Singapore has been receiving fewer, but bigger, containerships over the years. And that trend has been replicated in the first half of 2019 as ships with an aggregate gross tonnage of 434 million gross tons called at the city. In the first half of 2018, that figure was 443 million gross tons.

Further supporting evidence can be found at other ports as the very biggest of the box ships are deployed on routes out of Asia. Older, smaller ships are placed on other routes. For example, the Maersk Skarstind with 9,472 TEU and the MSC Elma with 9,411 TEU were seen for the first time ever sailing the loop around the Australian coast. They both called at Port Botany, Sydney and Fremantle. That simply would not have happened 10 or 15 years ago as any 9,000-plus TEU containership would most likely have been deployed on the mainline Asia-Europe route. At the time, Australia received ships with a maximum size of about 4,500 TEU to 5,000 TEU.

Small city, high maritime importance

Although Singapore is very important to the maritime world, in and of itself is not a major center for the import or export of containerized cargo.

Although Singapore is wealthy, it had a gross domestic product (GDP) of US$336.7 billion in 2017 with a GDP per capita of just under $60,000. Nonetheless, it is still quite a small country. It only has a population of about 5.6 million people, according to Statistics Singapore, a government department.

Singapore is, effectively, a trans-shipment hub for ocean-shipped cargo to, from and around Asia to the rest of the world.

The Lion City does a fair bit of business with the U.S. according to the UN's ComTrade database. The city imported about US$42.10 billion of goods from the U.S. in 2018 and exported about US$31.86 billion to the U.S. last year.

While that's a sizeable trade in goods, it's Singapore's trade with the rest of Asia, and the rest of the world, that makes it important to the global economy. The country's trade figures, and therefore the country's ports, are arguably a bellwether as to what is happening in international trade.

Singapore: imports and exports

About 15 percent of its import trade, or US$45.34 billion in 2017, was with China; US$38.86 billion or 13 percent was with Malaysia; US$20.48 billion or 6.8 percent was with Japan; and US$16.18 billion or 5.4 percent was with South Korea.

On the export side in 2017, China again accounted for 15 percent with $54.04 billion. That said, Hong Kong accounted for a further US$46.01 billion, or 13 percent of Singapore's export trade. Malaysia accounted for 11 percent, or US$39.58 billion; and Indonesia accounted for 7.8 percent or US$27.95 billion.

In the wider world, Singapore imported US$370.5 billion of goods from the rest of the world in 2018 and exported US$411.7 billion of goods in the same year. Bear in mind that Singapore's GDP in 2017 was only US$336.7 billion.

World trade woes

That world trade is slowing down seems to be a widely accepted fact now. For instance, back at the end of 2018, global freight forwarder DHL was reporting in its Global Trade Barometer that stable world and ocean trade growth was expected with only "a slight slowdown" owing to a weaker growth outlook in South Korea and Germany.

Jump forward three months to March 2019 and DHL was signaling that world trade was enjoying only slight growth and was "coming ever closer to stagnation." Ocean trade was experiencing "decelerated growth" with downturns in India, South Korea and the U.S.

And then, last month, DHL argued that world trade was "mildly declining for the first time in years." It described the ocean trade outlook as "sluggish" with almost all countries predicted to drop or stay below 50 points on its index, "indicating a contraction in growth." 

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