16.May - clecat.org MAR Michel Looten...European fashion imports by commodity type, 2000-2016 Index...

Confidential – not for third party distribution © Accenture 2017

European demand trends and

changing commodity patterns

Is consumer demand driving growth?

16.May.17

1Confidential – not for third party distribution © Accenture 2017

Healthy but contrasting demand growth on key trade lanes Rapid growth on Asian import trades have helped demand growth recover in recent months,

while European and American import trades still remain largely flat

1) 2015-2016 grow th in terms of TEUs; thickness of arrows is representative Jan-Dec 2016 trade lane size in TEUs

Source: Seabury Global Ocean Trade Database & Seabury Ocean Dashboard, excluding UN Comtrade; Seabury analysis (March 2017)

Containerized ocean trade growth, Dec’16 – Feb’17YoY growth, %1

Global containerized trade growth: 5.2%

Intra-Asia and back-haul trades drive most of the recent growth spurt

14

7

-43

15

0

2

0-1 0

7

02

3

10

0

0

8

4


Recent demand growth is on a path of clear recoveryGlobal demand growth has some unusual beneficiaries, like double-digit growth of European

exports to Asia; while Intra-Asia’s steady growth continues

Growth trends on selected trade lanes, 2014 – 2017YoY growth, %1

1) Smoothened for enhanced clearness

Source: Seabury Global Ocean Trade Database, excluding UN Comtrade; Seabury analysis (May 2017)

Current recovery of demand growth is almost reminiscent of the ‘good old days’

20172015 2016

5%

15%

-5%

10%

0

-10%

Europe to Asia

World

Asia to Europe

N DOSA J F MJ F M J JM JA S OAA FDJJ

Intra-Asia

M N


The long term growth trend is still on a declining pathAfter sustained double digit growth early in the century; growth rates in the container

industry have continuously dropped since 2008 to the current low single-digit levels

Global TEU growth rate, 2000 – 20165-year CAGR (%)

Source: Seabury Global Ocean Trade Database, Seabury analysis (May 2017)

0%

5%

10%

15%

’14’12’10’08’06’04’02’00 ’01 ’03 ’05 ’07 ’09 ’11 ’13 ’15 ’16

The container industry has grown below 3% on average in recent years

+2.5%+8.1%

Declining industry

growth rates


Drop in TEU growth cannot be explained by economy aloneAlthough GDP growth has also declined over the past years, containerized trade has seen a

much faster decline in growth, and now grows at similar levels as the overall economy

5-year average GDP multiplier1 ,2000 – 2016TEU / GDP growth

Notes: (1) The 2.4 ratio on 1990 means that TEU on average grew 2.4 times faster than GDP over the period 1985-1990

Source: Seabury Global Ocean Trade Database, EIU, World Bank; Seabury analysis, (May 2017)

0

1

2

3

4

’05 ’10 ’14’13’12’07 ’11’04’03 15 ’16’06 ’09’08’00 ’02’01

> 3.5

< 1.5

TEU: 8% 2%

GDP: 3% 2%

2000 2016


Economies have changed:

GDP growth is slowing down

China and other emerging markets are transitioning towards service

based economies

“New” emerging markets like Vietnam and Bangladesh lack scale

Trade has changed as well:

The boom of “supply chain globalization” after China entered the WTO is

coming to an end

Production and final assembly location sites of some industries are

moving back towards end-consumer markets

Finished goods no longer drive TEU growth, and intermediate goods and

raw materials are growing in importance

What has caused trade growth to drop so rapidly? Both the nature of the global economy and international container trade have changed

significantly since the 2008 financial crisis

The impact of finished goods declining in importance is often overlooked


Top trade-lanes were dominated by US imports back in 2000In 2000, container trade was mostly driven by finished goods exports from emerging to

developed markets, and trade of intermediate goods between mature economies

Top-10 global container trades, 2000Million TEU

Source: Seabury Global Ocean Trade Database (May 2017)

Intermediate goods were only of secundairy importance on top-3 trade lanes

China USA

China Japan

USA Japan

Japan USA

Taiwan USA

Italy USA

Germany USA

Taiwan Hong Kong

China S. Korea

USA China

Importer Exporter Annual volume by commodity type

1

2

3 32%

33%

0.6

0.5

1.0

1.0

0.9

0.6

0.5

24%

0.6

3.3

0.5

Intermediate goods

Raw materials

Finished goods


China has taken over the role of container empire by 2016Container trade has become much less dependent on the US consumer market, and now

relies strongly on China as an exporter & importer of a wide range of commodities

Top-10 global container trades, 2016Million TEU


Intermediate goods are now even more important on world’s largest trades

China USA

USA China

China Japan

China S. Korea

China UK

China India

Thailand China

China Germany

China Vietnam

Japan China

1

2

3

Importer Exporter Annual volume by commodity type

57%

43%

1.1

1.2

1.1

1.1

1.1

2.3

2.5

1.1

2.2

9.5

Finished goods

Raw materials

Intermediate goods

23%


Intermediate goods drive global container trade growthIntermediate goods have consistently outgrown the market, first at the expense of raw

materials, and for the last 8 years at the expense of finished goods

Container trade growth by commodity type, 2000-2016Absolute growth in million TEU

Source: Seabury Global Ocean Trade Database; Seabury analysis (May 2017)

110

Finished

9

Intermediate

30

Raw

8

Raw

14

Intermediate

2

Finished

133

2016

59

2000

11

2008

6% 9% 8% 8% 3% 3% 1% 2%

Finished goods have grown by only 1% on average in the last 8 years

8-year CAGR:


The fashion industry’s characteristics have changedFashion made of textiles has a relatively straight forward supply chain; cotton > thread >

fabric > clothes, but the importance of each segment changed over time

Global containerized trade of fashion goodsMillion tonnes


Clothing Inputs

35

Inputs

48

Clothing

15

Inputs

21

Clothing

8

14

Less finished goods were shipped, even though overall fashion-related trade grew

7% 8% 1% 5%8-year CAGR, %:

Clothing

Fabrics

Thread & yarns

Fibers

2000 2008 2016


European imports of fashion goods are a case in pointWhile European fashion import growth relied mainly on finished clothing until 2008, imports of

clothing stalled since 2008, while imports of fabrics and other fashion inputs continued to grow

European fashion imports by commodity type, 2000-2016Index (2000=100)


231222

78

97

153

200

50

100

150

200

250

’07’06’05’04’03’02’01’00 ’16’15’14’13’12’11’10’09’08

Relative strong growth of “fashion intermediates” suggests near-sourcing in Europe

2008-2016 CAGR:

0%

3%

2%

3%


The changes are clearly visible in the European marketThe center of growth shifts from consumer markets such as the UK, Germany and France,

to more production heavy markets like Italy, Spain and Poland

Top-8 clothing importers Europe, 2016Thousand TEU 8-year CAGR

Top-8 fashion-inputs importers Europe, 2016Thousand TEU 8-year CAGR


-2%

1%

2%

5%

4%

7%

11%

3%

2%

-1%

9%

2%

1%

-2%

-1%

2%

57Italy

76France

85Spain

94Netherlands

133Germany

44

158UK

18

Belgium

Denmark 18

38

44

48Belgium

45UK

Portugal

Poland

Netherlands

61Germany

63

29

Spain

Italy

2008 2016 increment

Intermediate goods grow faster, and to different markets than finished goods


Cargo weight per TEU varies considerably by commodity typeFinished clothes are light-weight, with intermediate goods and raw materials coming in

heavier containers

Average stuffing factor per commodity typeTons per laden container (TEU)

Impact stuffing factor on TEU growthIncremental TEU’s per 1,000 tons growth


5.2 tons

x

x

x

x

5.2 t

8.6 t

10.4 t

11.5 t

Any increase in cargo weight of heavier cargo translates into fewer additional TEU

87

96

116

191


Market outlookDemand trends and developments we see in container shipping today are not all positive,

but certainly also not all negative!

Trade patterns

TEU growth

Container-ization

Emerging markets

Market outlook

Less additional outsourcing to Asia-Pacific

Different commodities driving growth

East-West trades not catering for the majority of growth anymore

Structurally lower

More on short-distance (‘Intra’ trades) and N-S trades

Non-dominant legs currently growing faster than dominant legs

China becoming less export oriented

Consumer demand from developed markets less of a driving force for emerging

markets

No ‘New China’ on the horizon as ‘new’ emerging markets are relatively small-scale

Most commodities that can be containerized have been containerized

Reefer market offers some potential for additional containerization

Breakbulk and OOG potentially less attractive due to back-haul growing fast

Current lower growth cycle is likely to continue in the short term


Contact detailsFor more information, please contact…

Ronald Veldman

Senior Maritime Business AnalystSeabury Consulting

E-mail: [email protected]: +31 62 129 0489Phone: +31 20 880 4258

Website: www.seaburygroup.com

Michel Looten

Director MaritimeSeabury Consulting

E-mail: [email protected]: +31 62 139 1196Phone: +31 20 880 4265

Website: www.seaburygroup.com


Introduction Seabury ConsultingAs part of Accenture and with over 200 dedicated professionals, Seabury is the largest global

advisory practice in aviation and logistics, and the leading advisor to the global cargo industry

ForwardersIntegrators

Port

Authorities

Terminal

OperatorsAirlines

Seabury

CargoAdvisory

Shipping lines

Founded in 1995, Seabury provides management

consulting and business intelligence, originally for the aviation industry, but also for other logistics industries

Seabury Cargo Advisory provides services to many of

the world’s leading shipping lines, ports, forwarders, integrators, airlines and airports

Seabury Cargo Advisory has an unparalleled range of expertise in:

- Strategy consulting and business planning

- Operational improvement (e.g. cost reduction, revenue

boosting, contract negotiations and outsourcing)

- Network and alliance optimization; fleet selection, acquisition

and financing

- Business intelligence, market research and forecasting

The practice is led by a combination of former cargo airline and maritime experts, and consultants from leading cargo consulting firms

Seabury’s proprietary suite of software tools are considered the industry’s best with a depth of

analytics necessary to support rapid decision making


Exports from South China to Europe

TEU (‘000s)

2013

Global Ocean Trade DatabaseSeabury provides the industry's most comprehensive, reliable and up-to-date set of ocean

trade data with extensive historical time series and forecasts

200 countries

Covering ~99% of global ocean

trade

Country-to-country trade lanes

City-level detail for China, Brazil,

India & USA

Example: from Nanjing to Germany

Ocean trade

Measured in TEU, weight and value

Split by Containerized, Non-

Containerized and Oil, Fuel & LNG

Specific stuffing factors, supplied by

participating carriers, used to

convert container weights into TEU

Example: TEU

High update

frequency

Up-to-date customs data processed

and delivered every month

Lean and efficient processing times

allow to supply datasets with

minimum time lags

Example: year-to-date

Monthly

& yearly data Yearly data from 2000 onwards

provide insights on long-term trends

Quarterly data from 2000 and

monthly data from 2005 onwards

provide insights on seasonality

patterns

Example: monthly data

~2000 commodities

Using an in-house classification in

12 sectors and 70 industries,

tailored to international trade

Input based on HS6 or lower

Allows to analyze key industries as

well as detailed products

Example: frozen bovine meat

Christmas articles

Air conditioners10

0

2

4

6

8

AJOJAJOJAJ OJAJOJ

2014 2015 2016


Air, Ocean, Rail

& Road Modes

375,000 shippers

& manufacturers

14,000 Zip codes

2000 commodities

China Shipper Trade DatabaseSeabury’s China Shipper Trade Database allows analysis of shipments to and from Chinese

zip codes, capturing trade behavior of individual shippers by mode

7 IndustriesUpdated monthly

Database & Map Weight, value & shipments

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16.May - clecat.org MAR Michel Looten...European fashion imports by commodity type, 2000-2016 Index...

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