15 Oct 13 - 10:22
Drewry Maritime's latest annual Container Market Annual Review and Forecast 2013/14
highlights that while there is a good deal of excessive market
behaviour resulting in weak freight rates, ocean carriers are getting
half of it right.
With over 25 ULCVs (ships of at least 10,000 teu) delivered so far
this year, carriers have coped pretty well with deployment of tonnage in
the main East-West trades. As of 1 October, we estimate that headhaul
capacity in the three main East-West routes has increased by only 2.3%
year-on-year. However, there is still a structural over-capacity, and
Asia to North Europe spot rates have fallen in 33 of the 39 weeks so far
this year.
Given the weak fundamentals, carriers have been much more focused on
their costs in order to achieve any kind of decent profitability. We
calculate that the industry will save $5.5 billion on fuel this year,
partly because of lower physical market prices, but also due to network
changes, slow steaming, the introduction of more fuel-efficient ships
and bunkering in Russia. The importance of bunker savings was clearly
demonstrated by Maersk in its surprisingly strong second-quarter
financials this year.
Furthermore, there now seem to be considerable gaps between the best
and worst performing lines in the industry. Part of this may well be
down to cost savings and it could be that some of the operators with a
higher percentage of ULCVs in their fleets are now starting to reap the
true benefits of their economies of scale.
