Page 32: of Maritime Logistics Professional Magazine (May/Jun 2018)

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Global Container Shipping

Overall demand growth is expected to be lower than in 2017, but still high enough to potentially improve the fundamental market balance. BIMCO forecasts demand to grow by 4.0-4.5% against a feet growth of 3.9% in 2018. The IMF… signifcantly lifted expected

GDP growth in advanced economies for 2018 and 2019… generally good for container shipping demand.

– Peter Sand, BIMCO Lead Analyst logistics business Containerships (and Container Finance’s borne out by Alphaliner’s analysis, which shows the shipping gi- holdings in Multi-Link Terminals Ltd and CD Holding Oy) ant’s orderbook of 12 ships totaling 105,288 TEU, a mere 2.5% will become part of CMA CGM. The Finnish frm specializes of its existing controlled feet, well below industry average. in the intra-European market and will presumably strengthen Not everyone is worried about overcapacity. Analysts at

CMA CGM’s penetration there. Of course, the transaction re- Drewry Shipping, which produces the World Container In- mains subject to regulatory approval. dex, wrote in late April that “Fears of overcapacity are over-

A beefer COSCO, which had absorbed CSCL (1.974m hyped,” adding, “Deferrals mean that new containership de-

TEU, 8.9%), ranks fourth, followed by Hapag Lloyd (which liveries in 2018 will not damage the supply-demand balance. acquired United Arab Shipping Company) with 1.6 m TEU, or More ships are needed to keep up with demand projections.” 7.3% share of the total. The Ocean Network Express (ONE), BIMCO is also looking for steadiness in 2018, with Lead Ana- formed after three Japanese carriers joined forces – and lyst Peter Sand saying: “Overall demand growth is expected launched in April 2018, comprises 1.56 m TEU of controlled to be lower than in 2017, but still high enough to potentially capacity, or 7% of the total. One transaction in the works, but improve the fundamental market balance. BIMCO forecasts not yet concluded, will see COSCO acquiring Orient Over- demand to grow by 4.0-4.5% against a feet growth of 3.9% in seas Container Lines (OOCL), creating a carrier of approxi- 2018. The IMF … signifcantly lifted expected GDP growth mately 2.6 m TEU, if the deal comes to fruition. in advanced economies for 2018 and 2019… generally good

Each business combination has the potential to force a re- for container shipping demand.” BIMCO highlighted growth alignment of existing alliances, where groups of carriers are in cargo moving from Asia through the Panama Canal, saying, able to jointly market their capacity. Xeneta, offering a re- “2018 is likely to be the year where many container line net- pository of freight rates (and tools for comparing them) serves works calling the US East Coast will become fully up-scaled many stakeholders, and noted recently in a company blog, “We by deploying ultra large container ships.” are all seeing fewer carriers and bigger ships, making less-fre- quent calls at fewer ports, which can disrupt supply chains and TRADE WARS: FACT OR FICTION?

cargo fow. However, the industry is still in uncharted waters. “ As if the cost of fuel, the looming IMO 2020 deadline, over-

In another related effort to combat the plethora of extra ton- capacity fears and low freight rates weren’t enough to worry nage, some carriers were seeking to delay deliveries of mega- about, lurking in the background is the specter of political- ships. In early 2018, both COSCO and Yang Ming pushed back ly induced slowdowns in trade. The opening salvos in what newbuild deliveries, originally scheduled for 2018, out into 2019. could be a trade war affected neobulk commodities – steel,

On the other hand, South Korean carrier Hyundai Merchant Ma- aluminum, and bulk grains – notably U.S. sorghums bound for rine (HMM) trumpeted upcoming plans to order as many as China. So far, though fears about slowdowns in the box trades 20 vessels, including 12 of 20,000 TEU capacity. It is Maersk, have been widespread, impacts on containerized trades have however, that is often considered the business bellwether. The not (yet) materialized. That said, and as MLPro goes to print emphasis of its COO, Mr. Toft, on holding the line on supply is for this edition, the saber rattling from all sides – the United 32 Maritime Logistics Professional May/June 2018 | |