Rising export values from Germany and France and the best profits in a decade for the container shipping industry paint a positive picture for global trade – on first glance at least. 

Economies around the world dramatically declined after governments imposed lockdowns to prevent the spread of the coronavirus during the spring. 

As a result, the World Trade Organisation has predicted a 13.5% decline in global merchandise trade for 2020 in its ‘best case’ forecast. 

Eurozone exports recovery 

The FT yesterday reported (8 September) data from Eurostat – the European Commission’s data agency – showing a trade recovery may be under way in the largest European nations. 

German exports increased by value by just under 5% over the month of July, widening the country’s trade surplus to its highest level since February. The value of French exports grew by a tenth.  

Eurostat reduced its predicted GDP contraction for the eurozone for the second quarter of the year – the period in which lockdown restrictions had their greatest impact – from 12.1% to 11.8%. 

Record profits for shippers 

Container shipping also recorded its best quarter since 2010 in terms of profits. 

The industry earned $2.7bn from April to June, according to research from liner analyst Sea-Intelligence Consulting reported in Lloyds Loading List. Each of the top ten container carriers consulted in the survey reported profits. 

CEO of Sea-Intelligence Alan Murphy said the figures were evidence that shipping lines had navigated the crisis “rather well”. 

Overall exports still down 

However, the positive figures for eurozone exports and container shipping profits come with caveats, suggesting there is a long way yet to go before global trade recovers to pre-crisis levels. 

While German exports to China were only 0.1% down year-on-year in July, its exports to the US and UK were still down 17% and 12.6%. Overall exports from France over the last two months remain 17% down on last year. 

Shipping revenues in decline 

Container shipping profits are also a limited indicator of a global trade rebound as they are largely a result of cost cutting, lower volumes and higher freight rates, according to Murphy. 

Murphy explains that “nearly all carriers recorded a year-on-year decline in revenues, all carriers recorded an annual decline in transported volumes – both globally, and on Transpacific and AsiaEurope – and nearly all carriers recorded a higher freight rate compared to 2019 Q2.” 

The WTO continues to urge caution among economists predicting a V-shape recovery for global trade, citing fears of a second wave of the coronavirus.