Container Industry in 2018

توسطAli Karim 1 سالپیش

Container Shipping in 2018

As Harpex shows, container industry is trying to outrun its 6-year trend by reaching 646. Going higher and it will be the  highest since late 2011. so the the questions here are: Is it a good sign for 2018? does it mean that it will be a very prosperous year for shipping lines? Should the shippers get themselves ready for expensive transportation of their commodities?

Looking at the detailed growth of different sizes of container vessels makes it clear that the most profitable sizes have been:

Growth Rate % TEUs
۲۰ ۱۱۰۰
۲۰ ۲۷۰۰
۲۵ ۴۲۵۰
۲۵ ۶۵۰۰
۴۵ ۸۵۰۰

The obvious winner by far is the deep sea traders. One of the main reason for this huge rise in deep sea freight rates are the recent alliances and M&As formed in 2017 and the mega container ships they ordered. Since the sharp downfall of freight rates in 2008 onwards, the top carriers have changed the structure of seaborne container trade by forming alliances. The three alliances currently own %81 of the world’s container fleet, amongst whom 2M+Hyndai has the highest share (%36). The most recent change in the structure has been the radical move of three major Japanese carriers (K line, MOL and NYK) in founding a joint venture company (named Ocean Network Express) that in addition to being a member of THE Alliance, offer its own services to cover over 90 countries around the world.

Moreover, it seems that the three alliances and ONE have shown interest in expanding their service in minor routes such as Far east-Middle east and Africa. This can have huge impact. By their economies of scale and exclusive terminals or long time contracts with terminal operators they can achieve much more than just market share. However, we will just have to see about that and it may take a while to reach there.

Major Routes Analysis

Considering the rise in CCFI composite index of early 2018 which reached 850 in late February (%10 increase compared to late December); Latest data from World Container Index and CCFI show that there has been major dropdown in rates of Far east-Europe (%-27), Europe-Far east (%-42), Transpacific (%-12) in year-by-year comparison. However, Transatlantic route is going strong by increasing %11 compared to last year. One of the main reason in this downfall can be attributed to the new rules of China that ban the import of plastic waste and paper and that is a 7mt import (2016) going away and also to recent trade war between China and USA.

However, it does not seem that this decrease has impacted the time charter rates because there has been no influence whatsoever on Newcontex and Harpex, so it may be a temporary condition.

There are two scenarios that can happen in regard to the Chinese imports and exports. Apparently, China has decided to clean its environmental pollution and change the economic model of low-wage, high-exports to a more sophisticated, mature economy. If this is true then shipping lines will have another thing coming to them and they might face struggling freight rates in the next couple of years. However, China has shown the world that there is no stopping to it. According to Bloomberg prediction of China’s GDP in 2018, it will take the entire Euro-zone. The projected GDP of China in 2018 is 13.2 Trillion USD whereas Euro-Zone is 12.8 Trillion USD. That only, shows the economy of China is not yet to relax and kick it back.

In terms of freight rates, the growth of Harpex and Newcontex shows that 2018 will face a mild increasing level of freight rates (%10-20) if not interrupted by the recent trade war.

Middle east – Iran

It seems that the recent pick up in freight rates have not influenced Shanghai-Bandar Abbas 20 feet freight rates since it has been struggling back and forth between USD 300-600 in the last couple of months and it does not seem to go higher than that in 2018.

 However, the sentiment of the shipping companies are positive since the growth rate of supply in terms of deadweight is projected by Alphaliner to be %24.



دسته بندی ها ::
  economic analysis, Logistics
این پست به اشتراک گذاشته شد 0 بارها
درباره فروشگاه

 Ali Karim

  (67 مقالات نوشته شده توسط)

Ali Karim

لغو پاسخ

لطفاً ایمیل درگاه پرداخت خود را وارد کنید .