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Saturday Sep 21, 2024
Monday, 25 November 2013 00:00 - - {{hitsCtrl.values.hits}}
The spot rate from Shanghai to Mediterranean ports fell 5.4 % or $ 74 from the week before to $ 1,308 per TEU.
The spot rate from Shanghai to northern European ports for the week ending Nov. 15 dropped 8.1 % or $ 107 from the week before, down to $ 1,213 per TEU. The rate soared $ 753 per TEU two weeks ago, but it has now lost $ 210 or 27.9% of this gain. The SCFI rate to northern Europe for the week ending Nov. 15 is 1.0% below where it was at the same point in 2012, and 4.5% lower than at the beginning of 2013.
Carriers have already begun announcing their next round of increases in Asia-Europe lanes. MSC and Hapag Lloyd have announced increases of $ 775 and $ 750 per TEU, respectively, set for Dec. 15-16.
Minimal capacity growth in P3 Alliance
Subject to regulatory approval in the US, and European Union P3 Alliance members, Maersk Line, MSC and CMA CGM have chosen for only minimal vessel capacity growth in their proposed Asia-Europe and Asian-North America services for the 2nd quarter of 2014. As reported in London’s Drewry Maritime Research, P3 Alliance’s main fighting tool against its’ competitors will be service quality rather than quantity.
With regard to Asia-North Europe routes, only a 2.25% increase is planned compared to the available capacity at the start of September (excluding transshipments and slot charter cargo). One weekly service will be dropped, but this will be more than compensated by a 14% increase in average vessel capacity, up to 13,032 TEU, including the deployment of 18,000 TEU ships from Maersk.
On routes between Asia and the Mediterranean there will be one less weekly service. Vessel deployment within the new services remains to be clarified, meaning it is not yet possible to assess the impact of this on capacity.
Record high deliver of ships in 2013
Container ship deliveries are forecast to hit an all time high this year with a projected 1.7 million TEU coming on stream. However, with so many variables that are often not taken into account, the actual increase in the active global container ship fleet this year could be significantly lower.
Based on data compiled by Clarkson Research Services the global container ship fleet at the end of 2012 stood at 16.23 million TEU.
According to the group’s current estimates the fleet will grow by roughly 7% to 17.36 million TEU by the end of this year. This represents an increase in tonnage of 1.13 million TEU, well short of the 1.7 million TEU forecast by other parties. However, Clarkson’s figures do take into account a number of factors, including its’ own estimates on delivery slippage and scrapping.
Extinction of traditional ship finance
Traditional shipping finance has not changed: it’s gone, said Ron Widdows, current CEO of the German Rickmers Group, adding that the German KG system that financed 30% of the ships afloat (and for that reason often blamed for having spurred container ship over capacity) is no more.
Ship design modification
According to press reports, some ship owners are considering to raise the capacity of their 14,000 TEU ULCS to up to 16,000 TEU by adding two 40 ft container bays. The 365/370 metre length of a typical ship of this magnitude would then become just under 400 metres (comparable to Maersk Line’s Triple – E’s). With a breath of 51.0/51.2 metres, however, they would be one container narrower than a 16,000 TEU giant (53.6 to 54.0 metres).
Maersk Line revenue drops but profits up
Maersk Line posted a turnover of USD 19.7 billion during the first nine months of 2013 which is a contraction of 4% compared to the same period last year. Despite the reduction in the turnover, due to cost savings and a 3% higher lifting the shipping line posted a commendable net profit of USD 1.2 billion which is against USD 126 million recorded in the same period in 2012. However its’ CEO said the next 02 years will be relatively unfavourable for container shipping.
Troubled COSCO may de-list
As reported in the Container Shipping Manager, troubled China COSCO Holdings is struggling to reverse its weak financial position following another third quarter loss that puts it dangerously close to a delisting under Shanghai Stock Exchange rules.
The shipping giant will accumulate three consecutive years of losses if it fails to return to profit in the 2013 financial year, meaning that it will face a delisting under Shanghai Stock Exchange regulations, notes Sea trade Global. But COSCO narrowed its third quarter loss to CNY 1.04 billion (US$ 170 million) compared with last year’s net loss of CNY 1.53 billion.
Kandla Port Trust to control ABG PSA Terminal
The Kandla Port Trust has taken control of the ABG Kandla Container Terminal after the Ahmedabad high court approved the cancellation of the 30 year concession of its’ operator, a consortium between ABG (51%) and PSA International (49%), after it failed to meet the contractually-mandated minimum volumes for three consecutive years. According to ABG this was (at least partly) due to the port’s defaulting on its’ contractual obligations on dredging, night navigation, rail connectivity and back-up land, amongst others.
Chennai changes its focus
After several unsuccessful tender attempts, instead of building its long-desired (outer harbour) 4.8 million TEU mega terminal, Chennai has decided to develop a multi-purpose facility at this location, to also handle bulk cargoes. As the port is on the verge of awarding a 30 year concession for a new 800,000 TEU container terminal at Jawahar dock, this comes as no surprise.
Increased demand for JNP
Eight potential bidders have expressed interest in building the much delayed fourth container terminal at Jawaharlal Nehru Port (JNP), India’s largest container handling facility.
According to JNPT Deputy Chairman, N.N. Kumar, requests for qualification have been received from Adani Ports, Essar Ports, DP World, APM Terminals, PSA International, JM Baxi & Company, Mediterranean Shipping Company and Sterlite Ports.
JNP’s fourth container terminal project was seriously delayed after a consortium of PSA and ABG Ports, which was awarded the original concession in September 2011, failed to sign the concession agreement in a row over the payment of stamp duty.
The JNP Trust subsequently scrapped the award and decided to re-tender the project. JNP handled 4.26 million TEU in fiscal 2012-2013 and a forecast to handle 11 million TEU by 2016 and 23 million by 2020. Plans call for the fourth terminal to have an annual capacity of 2.4 million TEU, making it the largest in India.
Hard Soil/Rocks delay Pakistan deepwater port
The opening of the long delayed Pakistan Deepwater Container Port (PWDP) at Karachi, where Hutchison will operate the Karachi New Port Container Terminal (KNPCT), is now foreseen for the end of next year. The discovery of hard soil/rocks turned out to be a major hurdle, whilst the quay wall is not ready yet either.
The writer a Maritime Economist is a Chartered Fellow (Logistics Transport), Chartered Shipbroker (UK), Chartered Marketer (UK) and a University of Oxford Business Alumni. He is also a Fellow of NORAD/JICA and Harvard Business School (EEP)
