Global Outlook

It is customary at this time of year to take a quick look back over our shoulders at what has gone before but, perhaps more importantly, to make some predictions as to what lies ahead for the importer and exporter of meat products.

Despite the much-heralded austerity measures by EU governments, freight volumes through European ports are expected to continue to grow in 2011 though possibly not at the double-digit rates reported for this year at many of Europe's top ports.

Global shipping freight rates have been declining for around the past five months. For instance, rates on Asia-to-Europe services are at their lowest level this year.

The continuing rise in fuel prices and a surplus of vessel capacity have resulted in carriers increasing extra-slow-steaming (ESS) programmes again this winter whereby, by sailing at a slower speed, carriers are able to burn less fuel and absorb excess capacity as more ships are needed to maintain the frequency of schedules. It's worth noting, however, that the carriers have to play a delicate balancing game, as running at faster speeds often offers them a competitive advantage over rivals.

It has recently been reported that the containership order book has risen for the first time after 27 consecutive months of decline. Although it will not return to the heady levels of 2007, when it reached a peak of 64% of the fleet, its size is expected to remain in the 25-30% range next year. And, with current new-build prices about 20-30% off the 2007 peak, many shipping lines are taking a fresh look at their future fleets. All of this has led to analysts predicting growth of around 10% in overall shipping volumes for each of the next couple of years, much of it in the new, larger-capacity vessels.

But all of this will depend on a continuing revival in international trading conditions. And to predict what's going to happen there, I'd need a different crystal ball.