Mexico Shipping Report Q1 2011
Business Monitor International, January 2011, Pages: 97
Mexico Shipping Report provides industry professionals and strategists, corporate analysts, shipping associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Mexico's shipping industry.
Mexico's close economic links with the US, its main import and export partner, mean that the economicdownturn across the border has had a significant effect on economic growth. Country-specific factors,such as record levels of drug-fuelled violence, also weighed on domestic demand during 2009, makingMexico by far the worst hit regional economy in growth terms.While we expect the country's main port of Manzanillo to recover pre-downturn levels of throughput in2011, with total tonnage up 6.55% year-on-year (y-o-y) and 20-foot equivalent unit (TEU) throughput up9.83%, these figures are considerably less impressive than 2010's y-o-y growth of 18.15% and 23.16%respectively. Tonnage throughput at Mexico's largest Caribbean facility, the port of Veracruz, is estimatedto grow by an even less impressive 3.93% y-o-y in 2011, with slightly stronger y-o-y growth in TEUthroughput of 5.37%. Again, these figures are down on 2010's figures of 12.26% and 17.05%.Nevertheless, we expect both ports to recover pre-downturn throughput levels in 2011.
Headline Industry Data
- 2011 port of Manzanillo tonnage throughput forecast +6.55% following projected growth of18.5% in 2010.
- 2011 port of Veracruz tonnage throughput forecast +3.93% following projected growth of12.26% in 2010.
- 2011 port of Manzanillo TEU throughput forecast +9.83% following projected growth of23.16% in 2010.
- 2011 port of Veracruz TEU throughput forecast +5.37% following projected growth of 17.05%in 2010.
- 2011 real total trade forecast to grow +5%, nominal growth forecast at +15.82%Key Industry Trends
Recovery Evident In Nationwide Throughput Increase. Container ports in Mexico handled 2.7mn TEUs inthe first nine months of 2010, a 33% increase from the same period in 2009, according to research bymaritime consultant Dynamar. An overwhelming majority of the country's throughput is handled at fourports: Manzanillo and Lazaro Cardenas on the country's west coast and Veracruz and Altamira on the eastcoast. Those four ports handled 93.6% of the country's throughput in the first three quarters of the year.Mexican Ports Attacking International Interest. APM Terminals (APMT) has confirmed that it isinterested in bidding to operate a container terminal at Mexico's Lazaro Cardenas port. BMI believes thatthe company's interest in Latin America reflects the region's growing importance in global logistics.Lazaro Cardenas' port authority, API, announced plans to launch a tender to concession a second terminalat the port earlier this year. The terminal will require an investment of US$465mn, and will have thecapacity to handle 2mn TEUs per annum. BMI notes that the port has no congestion problems and offersthe lowest dwell time of all Mexican ports. The port is well located, providing access to Mexico City andto Monterrey for the northern market.
Risks To OutlookThere are three possible downside risks to our outlook. Firstly, and most significantly, is the USeconomy, which remains one of the single most important drivers of overall Mexican GDP growth andport sector demand. For 2011, we are revising our forecast down slightly, to 1.6% from 1.8% for 2010.Both of these forecasts remain below the Bloomberg consensus estimates of 3% for 2010 and 2.8% for2011. Our expectation of weak long-term growth beyond this period, at around 2.3%, has not changed. Afaster-than-expected US slowdown would have a negative impact on our shipping forecasts.
A second risk exists in the form of a drop-off in consumer demand, which would negatively affectimports, and therefore the ports sector. Over the longer term, the Mexican consumer story is expected tocontinue lagging behind some other emerging markets. The rapid growth in consumer credit leading up tothe financial downturn has since reversed and shows little sign of returning, with lenders instead turningtheir attention to the mortgage and commercial sectors. This partly explains why shares in Mexico'slargest retailer, Walmart de Mexico, trail a long way behind Chile-based Falabella, which operates inLatin American countries where our consumer outlook is more favourable such as Chile and Peru. InMexico, consumer confidence surveys suggest that the consumer remains very wary, and while there hasbeen a slight improvement in this indicator over the past few months, the country is expected to behampered by its very close ties to the US.
Finally, a further downside risk to our outlook presents itself in the form of domestic political risk,specifically the prospect of the government becoming deadlocked in congress due to the strengthened PRIopposition party. This could affect investor sentiment and jeopardise new port sector projects.
Executive Summary
SWOT Analysis
Mexico Shipping SWOT
Global Overview
Container Shipping Overview
Dry Bulk Shipping Overview
Liquid Bulk Overview
Industry Trends And Developments
Market Overview
Port of Manzanillo
Overview
Terminals, Storage And Equipment
Expansions And Developments
Multi-Modal Links
Port of Veracruz
Overview
Terminals, Storage And Equipment
Expansions And Developments
Multi-Modal Links
Industry Forecast
Table: Major Port Data
Table: Trade Overview
Table: Key Trade Indicators
Table: Main Import Partners
Table: Main Export Partners
Company Profiles
A.P. MØLLER-MAERSK
Mediterranean Shipping Company (MSC)
CMA CGM
Neptune Orient Lines (& APL)
Hapag-Lloyd
Evergreen Line
China Ocean Shipping (Group) Company (COSCO)
CSAV Shipping
China Shipping (CSCL)
Hanjin Shipping
Mitsui OSK Lines (MOL)
Nippon Yusen Kabushiki Kaisha (NYK)
- A.P. MØLLER-MAERSK
- Mediterranean Shipping Company (MSC)
- CMA CGM
- Neptune Orient Lines (& APL)
- Hapag-Lloyd
- Evergreen Line
- China Ocean Shipping (Group) Company (COSCO)
- CSAV Shipping
- China Shipping (CSCL)
- Hanjin Shipping
- Mitsui OSK Lines (MOL)
- Nippon Yusen Kabushiki Kaisha (NYK)
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