In July and August, the shipping company's large-scale suspension will continue! Container freig
- Author:Kyrie
- Source:Sohang
- Release Date:2020-06-20
According to the latest data released by Alphaliner, by the end of May this year, the number of container ships at idle had risen to 551, with a total capacity of 2.72 million TEU, equivalent to 11.6% of the global total capacity. Set a record high in history!
According to the recent statements of several giant shipping companies such as Maersk, during the epidemic crisis, shipping companies that performed well in industry self-discipline achieved good results in capacity management and control. The entire shipping industry is not expected to experience huge losses in 2020 (but it is not excluded that a few companies will still lose money).
The shipping company's massive suspension will continue
According to Lloyd’s Daily, the impact of the new coronary pneumonia epidemic on container transportation demand will continue into the third quarter of this year. In recent weeks, the shipping company's planned capacity to stop in the third quarter has suddenly increased.
On the demand side, ContainerTrades Statistics data show that global demand growth fell sharply in April, with monthly data dropping by 16.9% year-on-year.
From January to April this year, global container transportation demand contracted by 8.1%, which translates to a reduction of 4.4 million TEU in terms of TEU freight volume. In addition, the degree of contraction in demand varies from region to region. For example, the Indian subcontinent and the Middle East have been hit hardest, with imports and exports falling by more than 25% in April.
From the perspective of the capacity supply side, after experiencing a relatively stable state for about 6 weeks, the 23rd week of this year (the first week of June), the number of shipping companies announced suspension of flights increased sharply. All economic indicators indicate that the epidemic will cause a continued downturn in global demand, and shipping companies, especially the 2M Alliance and THE Alliance, have extended the suspension plan to the third quarter.
In detail, last week (the 23rd week), the increase in shipping capacity reached 15.2%, the highest weekly increase since the 14th week.
In fact, the outage caused by the epidemic has reached the level of 4 million TEU, which is about 3.2 times that of the Spring Festival in 2020.
Before the 22nd week, the shipping company had not announced plans for a large-scale suspension in the third quarter. But in the 23rd week, only one week, the shipping capacity increased by 500,000 TEU.
It is expected that in the next 24-35 weeks, shipping companies will reduce capacity by 7% on the Asia-North America West Coast route and Asia-North America East Coast route respectively, while Asia-North Europe and Asia-Mediterranean routes will decrease by 13% and 17% respectively.
In other words, the transshipment capacity of the trans-Pacific route will reach 420,000 TEU, while the transshipment capacity of the Asia-Europe route will reach 790,000 TEU.
It is worth mentioning that the Ocean Alliance did not announce a large-scale suspension plan as early as the 2M Alliance and THE Alliance. This also means that the suspension plan from the Ocean Alliance may come suddenly.
Container freight rates continue to rise
Traditionally, in times of crisis, it is difficult for shipping companies to maintain freight rates higher than costs, because there will always be a shipping company that breaks the rules and tries to use price cuts to gain market share or increase the ship's loading rate, but this time, there is no To such a situation.
From the freight rate, we can see a glimpse. In the first week of March, the spot freight rate on the Asia-US West Coast was US$1,361/FEU, and on June 12, this number surged to US$2,755/FEU, an increase of 102%.
Despite the sharp drop in demand, the cancellation of shipping capacity by shipping companies has had a positive effect on freight rates. In other words: the stability of freight rates is related to the idle capacity of shipping companies and the cancellation of voyages.
Alphaliner expects that as more countries begin to unblock, transportation demand will resume soon, and the global capacity of idle container ships will soon reach its peak. The agency said: "There are many indications that shipping companies have overestimated the degree of contraction in market demand in May this year. Some shipping markets have already experienced capacity shortages and spot freight rates have begun to push up."
According to the recent statements of several giant shipping companies such as Maersk, during the epidemic crisis, shipping companies that performed well in industry self-discipline achieved good results in capacity management and control. The entire shipping industry is not expected to experience huge losses in 2020 (but it is not excluded that a few companies will still lose money).
The shipping company's massive suspension will continue
According to Lloyd’s Daily, the impact of the new coronary pneumonia epidemic on container transportation demand will continue into the third quarter of this year. In recent weeks, the shipping company's planned capacity to stop in the third quarter has suddenly increased.
On the demand side, ContainerTrades Statistics data show that global demand growth fell sharply in April, with monthly data dropping by 16.9% year-on-year.
From January to April this year, global container transportation demand contracted by 8.1%, which translates to a reduction of 4.4 million TEU in terms of TEU freight volume. In addition, the degree of contraction in demand varies from region to region. For example, the Indian subcontinent and the Middle East have been hit hardest, with imports and exports falling by more than 25% in April.
From the perspective of the capacity supply side, after experiencing a relatively stable state for about 6 weeks, the 23rd week of this year (the first week of June), the number of shipping companies announced suspension of flights increased sharply. All economic indicators indicate that the epidemic will cause a continued downturn in global demand, and shipping companies, especially the 2M Alliance and THE Alliance, have extended the suspension plan to the third quarter.
In detail, last week (the 23rd week), the increase in shipping capacity reached 15.2%, the highest weekly increase since the 14th week.
In fact, the outage caused by the epidemic has reached the level of 4 million TEU, which is about 3.2 times that of the Spring Festival in 2020.
Before the 22nd week, the shipping company had not announced plans for a large-scale suspension in the third quarter. But in the 23rd week, only one week, the shipping capacity increased by 500,000 TEU.
It is expected that in the next 24-35 weeks, shipping companies will reduce capacity by 7% on the Asia-North America West Coast route and Asia-North America East Coast route respectively, while Asia-North Europe and Asia-Mediterranean routes will decrease by 13% and 17% respectively.
In other words, the transshipment capacity of the trans-Pacific route will reach 420,000 TEU, while the transshipment capacity of the Asia-Europe route will reach 790,000 TEU.
It is worth mentioning that the Ocean Alliance did not announce a large-scale suspension plan as early as the 2M Alliance and THE Alliance. This also means that the suspension plan from the Ocean Alliance may come suddenly.
Container freight rates continue to rise
Traditionally, in times of crisis, it is difficult for shipping companies to maintain freight rates higher than costs, because there will always be a shipping company that breaks the rules and tries to use price cuts to gain market share or increase the ship's loading rate, but this time, there is no To such a situation.
From the freight rate, we can see a glimpse. In the first week of March, the spot freight rate on the Asia-US West Coast was US$1,361/FEU, and on June 12, this number surged to US$2,755/FEU, an increase of 102%.
Despite the sharp drop in demand, the cancellation of shipping capacity by shipping companies has had a positive effect on freight rates. In other words: the stability of freight rates is related to the idle capacity of shipping companies and the cancellation of voyages.
Alphaliner expects that as more countries begin to unblock, transportation demand will resume soon, and the global capacity of idle container ships will soon reach its peak. The agency said: "There are many indications that shipping companies have overestimated the degree of contraction in market demand in May this year. Some shipping markets have already experienced capacity shortages and spot freight rates have begun to push up."
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