alert! The container ship market faces great uncertainty this year
- Author:Alvin
- Source:HKSG-GROPU
- Release Date:2019-04-19
alert! The container ship market faces great uncertainty this year
For the container ship market, there will be great uncertainty in 2019. The additional cost of the sulfur-restricted order and the balance of supply and demand brought about by the delivery of a large number of new large container ships mean that 2019 is a challenging year.
Drewry, a shipping consultancy, recently said that the container industry is facing extreme uncertainty among many unfavorable factors, which may be the highest level in a decade. The range of uncertainties includes additional costs associated with the new IMO 2020 sulfur emission regulations, compensation received by operators from shippers, the possibility of trade declines, and unknown participants in large ship construction plans.
According to the latest data released by the container data provider Container Trade Statistics (CTS), the global container volume in the first two months of 2019 decreased by about 2.1% compared with the same period of last year. In addition to the European market, many markets showed different degrees of decline. CTS believes that the reduction in cargo volume cannot be explained by the impact of the Sino-US trade war, because the decline in cargo volume is “global”.
Ma Sok Shipping CEO Shi Soren said earlier that the demand growth rate of the shipping industry this year is only 1-3%. However, unlike Maersk, Hapag-Lloyd CEO Rolf Habben Jansen is optimistic that the global container industry demand growth rate is 4.1-4.7% this year and 4.9% in 2020.
From the data of the previous two months, the prediction of Scherson can be more accurate. The World Trade Organization (WTO) recently lowered its forecast for global economic growth, down from 3.7% to 2.6%, conveying a pessimistic signal.
In the five-year forecast of London's Container Forecaster magazine, the container port throughput in each region is expected to increase every year, although the growth rate is slightly lower than Deluri's previous expectations. In addition, by 2023, supply growth is expected to be lower than demand growth, which will help to continuously strive to rebalance the oversupply market. Delury expects that the industry will be close to equilibrium in 2023, with the global supply and demand index reaching 97.1.
Simon Heaney, senior manager of container research at Delu and Container Forecaster, said: "Our analysis clearly shows that operators must increase fuel returns, otherwise serious consequences will result."
"Let us have confidence in tomorrow, despite the weak fundamentals of supply and demand, last year's operators managed to obtain a slightly higher freight rate, proving that they have the ability to exercise a greater degree of pricing power. We expect the International Maritime Organization to Increase fuel costs in the industry by about 50%, which helps keep operators running."
Delury expects shippers to have a strong rejection of the new fuel surcharge formula, but because the market has more widely accepted responsibility sharing and shipping companies have long negotiated with shippers to resolve solutions, operators may be more than ever. Success, have time to solve any initial problems.
"Most shippers admit that they have to pay more, but they have reason to expect a credible and reliable mechanism for any increase. In other words, the initiative is in the hands of the operators," Heaney said.
For the container ship market, there will be great uncertainty in 2019. The additional cost of the sulfur-restricted order and the balance of supply and demand brought about by the delivery of a large number of new large container ships mean that 2019 is a challenging year.
Drewry, a shipping consultancy, recently said that the container industry is facing extreme uncertainty among many unfavorable factors, which may be the highest level in a decade. The range of uncertainties includes additional costs associated with the new IMO 2020 sulfur emission regulations, compensation received by operators from shippers, the possibility of trade declines, and unknown participants in large ship construction plans.
According to the latest data released by the container data provider Container Trade Statistics (CTS), the global container volume in the first two months of 2019 decreased by about 2.1% compared with the same period of last year. In addition to the European market, many markets showed different degrees of decline. CTS believes that the reduction in cargo volume cannot be explained by the impact of the Sino-US trade war, because the decline in cargo volume is “global”.
Ma Sok Shipping CEO Shi Soren said earlier that the demand growth rate of the shipping industry this year is only 1-3%. However, unlike Maersk, Hapag-Lloyd CEO Rolf Habben Jansen is optimistic that the global container industry demand growth rate is 4.1-4.7% this year and 4.9% in 2020.
From the data of the previous two months, the prediction of Scherson can be more accurate. The World Trade Organization (WTO) recently lowered its forecast for global economic growth, down from 3.7% to 2.6%, conveying a pessimistic signal.
In the five-year forecast of London's Container Forecaster magazine, the container port throughput in each region is expected to increase every year, although the growth rate is slightly lower than Deluri's previous expectations. In addition, by 2023, supply growth is expected to be lower than demand growth, which will help to continuously strive to rebalance the oversupply market. Delury expects that the industry will be close to equilibrium in 2023, with the global supply and demand index reaching 97.1.
Simon Heaney, senior manager of container research at Delu and Container Forecaster, said: "Our analysis clearly shows that operators must increase fuel returns, otherwise serious consequences will result."
"Let us have confidence in tomorrow, despite the weak fundamentals of supply and demand, last year's operators managed to obtain a slightly higher freight rate, proving that they have the ability to exercise a greater degree of pricing power. We expect the International Maritime Organization to Increase fuel costs in the industry by about 50%, which helps keep operators running."
Delury expects shippers to have a strong rejection of the new fuel surcharge formula, but because the market has more widely accepted responsibility sharing and shipping companies have long negotiated with shippers to resolve solutions, operators may be more than ever. Success, have time to solve any initial problems.
"Most shippers admit that they have to pay more, but they have reason to expect a credible and reliable mechanism for any increase. In other words, the initiative is in the hands of the operators," Heaney said.