The Megas are Coming: Containers Still Chasing Cargo
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THE MEGAS ARE COMING: CONTAINERS STILL CHASING CARGO
Transcript of The Megas are Coming: Containers Still Chasing Cargo
THE MEGAS ARE COMING: CONTAINERS STILL CHASING
CARGO
ABOUTXENETA
At Xeneta we believe there is an untapped potential for everyone in the industry, to systematically learn from our individual and collective efforts. We hold true that "if you cannot measure it, you cannot improve it". That’s why we think actionable metrics is the key to continuously evolve for every business, and ultimately the entire industry. Rethinking global logistics is the vision of Xeneta.
With international experience from the logistics industry, we have first-hand knowledge of the challenges related to high volatility and lack of transparency in the ocean freight market. By combining logistics background and information technology expertise, we found the solution
WE ARE TRANSFORMING GLOBAL LOGISTICS
ARE YOU PAYING THE RIGHT CONTAINER
FREIGHT RATES?
DISCOVER SAVINGS POTENTIAL IN REAL
TIME.
CONTACT US.
IT COULD BE SAID THAT CONTAINERSHIP CARRIERS MAY VERY WELL HAVE SOMETHING ELSE COMING. THERE ARE TOO MANY MEGAS COMING INTO SERVICE, AND THIS AVALANCHE OF EMPTY BOXES IS THREATENING TO UPSET THE TENUOUS OCEAN FREIGHT RATE GAINS OF THE PAST SIX MONTHS.
MARCH 1 MARKED THE SIX MONTH ANNIVERSARY OF THE HANJIN
BANKRUPTCY, WHOSE SUDDEN AND BRUTAL DEATH LIKELY SAVED THE BOX-SHIP INDUSTRY FROM LOSING
3-5 OTHER CARRIERS.
WHILE RATES HAVE SLIGHTLY SLID SINCE CHINESE NEW YEAR, THEY ARE
STILL ALMOST DOUBLE THOSE OF LAST SUMMER WHEN THE MARKET
AVERAGE PRICE IN THE XENETA SPOT RATES INDEX AT THE END OF JUNE
STOOD AT $1034 (CHINA MAIN PORTS – NORTH EUROPE MAIN | 40’
CONTAINER).
TODAY (MARCH 3, 2017), THE XENETA SPOT RATES INDEX SHOWS THE
MARKET AVERAGE PRICE FOR A 40’ BOX FROM CHINA MAIN PORTS – NORTH EUROPE MAIN PORTS AT $1761, UP 252% SINCE THE SAME
TIME LAST YEAR WHEN THE SAME BOX WAS MOVED ON THE SAME
CORRIDOR AT A MARKET AVERAGE PRICE OF $499.
MEGA VESSELS WITH OVERCAPACITY | WHAT
GIVES?
LAST YEAR, CARRIERS CONTINUED TO CANCEL SAILINGS, RE-JIGGERED THEIR BASICALLY INEFFECTIVE ALLIANCES, AND SCRAPPED A RECORD AMOUNT OF CONTAINERSHIPS – BUT NOW IT ALL MAY COME UNDONE AS PREVIOUSLY CONTACTED MEGASHIPS BEGIN TO ARRIVE. THE NEW VESSELS THREATEN TO UPSET THE TENUOUS SUPPLY-DEMAND RATIO OF BOXES-TO-CARGO THAT WAS FINALLY BEGINNING TO BALANCE.
LAST YEAR, CARRIERS CONTINUED TO CANCEL SAILINGS, RE-JIGGERED THEIR BASICALLY INEFFECTIVE ALLIANCES, AND SCRAPPED A RECORD AMOUNT OF CONTAINERSHIPS – BUT NOW IT ALL MAY COME UNDONE AS PREVIOUSLY CONTACTED MEGASHIPS BEGIN TO ARRIVE. THE NEW VESSELS THREATEN TO UPSET THE TENUOUS SUPPLY-DEMAND RATIO OF BOXES-TO-CARGO THAT WAS FINALLY BEGINNING TO BALANCE.
JUST LAST WEEK MSC RECEIVED THE 19,472 TEU MSC RIFAYA, AND WITHIN THE NEXT 30 DAYS WILL TAKE DELIVERY
OF TWO MORE 19,500 TEU VESSELS
AND WHERE WILL THIS ALMOST 60,000 NEW TEU'S BE DROPPED?
INTO THE ALREADY-BLOATED ASIA-NORTH EUROPE ROUTES. UASC WILL BE BE ADDING TO THE GLUT; THEY HAVE SIX 18,800 TEU MEGAS (TOTALLING112,800) ALONG WITH ELEVEN 15,000 (165,000) TEU VESSELS ON ORDER.
THAT'S 337,800 EMPTY TEU'S ARRIVING INTO A MARKET THAT'S ALREADY FLOODED WITH 1.3 MILLION TEU'S (340 SHIPS) LAID-UP CAPACITY; WITH THIS MANY EMPTY BOXES, CAN THE MARKET STILL BASK IN THE RALLY FROM THE PAST FEW MONTHS?
TIGHTER CAPACITY MEASURES HAVE INDEED BEEN TAKEN BY CARRIERS TO BAND AID THE CHALLENGE AS THE MEGAS SOON INVADE THE SCENE. IS IT ENOUGH?
LAST YEAR, CARRIERS CONTINUED TO CANCEL SAILINGS, RE-JIGGERED THEIR BASICALLY INEFFECTIVE ALLIANCES, AND SCRAPPED A RECORD AMOUNT OF CONTAINERSHIPS – BUT NOW IT ALL MAY COME UNDONE AS PREVIOUSLY CONTACTED MEGASHIPS BEGIN TO ARRIVE. THE NEW VESSELS THREATEN TO UPSET THE TENUOUS SUPPLY-DEMAND RATIO OF BOXES-TO-CARGO THAT WAS FINALLY BEGINNING TO BALANCE.
LEARN HOW XENETA CAN HELPYOU GET INSIGHT INTO YOUR
GLOBAL OCEAN FREIGHT PRICES.
REQUEST DEMO NOW
LAST YEAR, CARRIERS CONTINUED TO CANCEL SAILINGS, RE-JIGGERED THEIR BASICALLY INEFFECTIVE ALLIANCES, AND SCRAPPED A RECORD AMOUNT OF CONTAINERSHIPS – BUT NOW IT ALL MAY COME UNDONE AS PREVIOUSLY CONTACTED MEGASHIPS BEGIN TO ARRIVE. THE NEW VESSELS THREATEN TO UPSET THE TENUOUS SUPPLY-DEMAND RATIO OF BOXES-TO-CARGO THAT WAS FINALLY BEGINNING TO BALANCE.
MAERSK TAKES A PRAGMATIC APPROACH
MAERSK, ON THE OTHER HAND; TOOK A REALISTIC VIEW OF THE MARKETPLACE AND PUSHED THEIR 2017 DELIVERIES OF NINE 14,000 TEU VESSELS (126,000) OUT TO 2018-2019.
THEY SAID THEY DID NOT HAVE TO MAKE ANY PENALTY PAYMENTS TO THE SHIPYARDS, AND IF VOLUMES IMPROVED THERE WERE SUFFICIENT SHIPS THAT COULD QUICKLY BE CHARTERED.
THAT'S PERHAPS SOME OF THE COMMON SENSE THINKING OTHERS IN THE INDUSTRY SHOULD ALSO DISPLAY.
GOVERNMENT ASSISTANCE WILL LIKELY BE REQUIRED BY THE YARDS, BUT WITH 1.6 MILLION TEU'S OF NEW VESSEL CAPACITY ARRIVING IN 2017, ANOTHER 12-18 MONTHS OF COLLAPSING RATES WILL SURELY BRING MORE CARRIER BANKRUPTCIES AND TURN THOSE TEMPORARY LAYOFFS AT THE YARDS PERMANENT.
