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Tuesday Sep 24, 2024
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(Reuters) - Acquisitions and joint ventures in the shipping sector are set to pick up next year as prospects improve for seaborne trade and optimism among freight players grows, a survey showed last week.
The poll by law firm Norton Rose of 679 international transport companies, financiers and others also found the aviation sector was seen as experiencing the strongest recovery from global recession compared with other transport sectors. The survey, which polled 177 participants from the shipping industry, said 60 percent were planning joint ventures and 58 percent looking at strategic acquisitions in the next 12 months.
“Last year there was a muted reaction towards any suggestion of growth or expansion,” said Harry Theochari, global head of transport at Norton Rose.
“Now, we’re seeing a lot more appetite for joint ventures and even acquisitions. That’s not to say that we’ll wake up tomorrow to dozens of corporate tie-ups, but the door is certainly more open to corporate activity from shipping companies.”
Global turmoil in 2008 battered seaborne trade.
Norton Rose said 17 percent of respondents believed recovery in the sector was already happening, compared with 9 percent in the law firm’s first transport survey last year. A further 14 percent said they expected recovery to happen in the next year.
While China’s demand for commodities has continued to drive freight market activity, the shipping sector has yet to recover to pre-crisis levels, compounded by the growing pace of fleet growth especially in the dry bulk, container and tanker sectors.
Norton Rose said China was identified as a key area of investment by shipping companies more than by their counterparts in the rail and aviation sectors.
The survey found 68 percent of those polled from shipping expected passenger numbers and freight volumes to increase in the next year.
“Shipping has seen a strong recovery over the last year, driven in large part by significant regional trends,” Theochari said. “Demand from China, as well as Asia Pacific more generally, has helped inject an optimism into the market that was lacking this time last year.”
For the airline industry, the global economic recession led to its worst downturn in history, forcing airlines to cut capacity and lay off staff. [ID:nLDE68K1FA]
Of 209 aviation participants in the survey, 21 percent said recovery was already happening in the sector, 47 percent expected their routes and services to increase in the next year and 58 percent were actively considering joint ventures.
“The fact that so many are considering joint ventures in the coming year suggests an increasingly active sector and a more positive outlook,” said Neil Poland, global head of aviation at Norton Rose.
Evergreen Marine in talks to buy 10-12 container ships
GUANGZHOU (Reuters) - Taiwan’s Evergreen Marine, which operates the world’s fifth largest container fleet, is in talks to buy 10 to 12 container ships on top of 20 it ordered earlier this year, its chairman said.
Bronson Hsieh said he was “cautiously optimistic” for the global shipping industry next year and wanted to expand the firm’s fleet to meet an expected recovery in demand. “The ships we ordered in July and September are from Samsung (Heavy Industries (010140.KS)) and at around $100 million each. We plan to order altogether more than 30,” Hsieh told reporters on the sidelines of an industry conference..jpg)
The ships are expected to be delivered from 2013 and would each have the capacity of 8,000 twenty-foot equivalent units (TEU).
Evergreen had 20 ships in its order book as of Oct. 10 with total capacity of 160,000 TEU, or 45.5 percent of its existing capacity, according to industry consultancy Clarkson Research Services Ltd.
These new orders, if placed, would expand the company’s order book to up to 73 percent of its existing fleet size. Global demand for container vessels is expected to surpass fleet expansion by between 1 and 4 percent in 2011, a rare bright spot for the overall freight market, a senior industry executive said.
Evergreen and other container shipping firms have returned to profit this year after reporting huge losses last year due to global financial crisis, which slashed seaborne trade.
COSCO chairman sees freight recovery in 3-5 yrs
(Reuters) - The head of China COSCO, the world’s largest dry bulk firm expects the global freight market to recover in three to five years, he said last week.
“China’s internal demand is huge, external demand is also growing and we will see another spring in three to five years’ time,” Wei Jiafu told reporters at an industry conference.
The container market, which is closely linked to world economic growth, has already started to recover with companies returning to profit after the financial crisis, he added.
Growth in intra-Asia trade to drive freight-industry execs
GUANGZHOU (Reuters) - Intra-Asia trade will be the lynchpin for the global shipping industry in the near term as the West slowly recovers from the financial crisis, senior maritime executives said.
Led by growing consumer consumption in China and India, intra-Asia trade has remained resilient despite a huge dropoff in overall freight traffic over the last two years.
“Boosted by the expansion of China’s domestic market, intra-Asia trade was able to reduce the impact of an economic recession,” said Bronson Hsieh, chairman of Taiwan’s Evergreen Marine at an industry conference.
“There is no question that intra-Asia trade will be the focal point of the shipping industry in the future.”
Asia’s economies are in the driving seat, with the IMF expecting China’s economy to grow 9.6 percent next year and India to expand by 8.4 percent.
The IMF forecasts economic growth in Asia at 6.7 percent in 2011, compared with 1.8 percent in Europe and 2.3 percent in the United States.
A reduction in import tariffs between China and the Association of Southeast Asian Nations (ASEAN) has boosted trade between the two by 47 percent to $185 billion within the first eight months of this year.
“In a few years, I do see Asia decoupling from the West,” said Alan Marsh, chief executive of leading shipbroker firm Braemar Shipping.
“Ten years ago, no one would have predicted what is happening with Asian growth and the problems in the United States at the same time.” Signs of Asia’s growing influence have become increasingly evident throughout the maritime industry.
Companies ranging from ship broker Howe Robinson to Rolls Royce and Deutsche Bank have either expanded or relocated their maritime businesses to Asia.
The container industry, which is closely linked to world economic growth, meanwhile has introduced 26 new service routes between China and ASEAN countries this year.
Container trade in Southeast Asia rose by 17 percent to 6.4 million twenty-foot equivalent units in the first half of this year, surpassing the 12-14 percent increase in the Asia-U.S. and European routes, Evergreen Marine’s Hsieh said.
