⚓ Your Weekly Maritime News - 09
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Today's Wisdom from the Waves; 🌊
"As the great sea holds boundless stories, so do those who dare to sail it. Explore, embrace, and let the waves of adventure carry you." - Jacques Cousteau
🚢 Navigating Knowledge: Container Shipping Quiz Time! 🚢
*Last Week’s Answer: Satellite Communication
1- WindWings Revolutionize Shipping
Pyxis Ocean, an 81,000-dwt bulk carrier, unveiled two 37.5m high WindWings in Singapore.
These WindWings, developed by BAR Technologies and Yara Marine Technologies, are set to reduce fuel consumption by up to 30%.
Mitsubishi Corp., the ship's owner, and Cargill, its charterer, demonstrate a commitment to environmental action in the shipping industry.
The installation of WindWings highlights the urgency for the maritime sector to embrace eco-friendly solutions for existing vessels.
2- 5 Takeaways from the Interview of Hapag LLoyd CEO
Cost Management is Crucial: When rates fall below profitability, cost-saving measures become essential.
Rational Decision-Making: In response to cash-negative situations, rational actions, such as cost reduction, are expected across all trade routes.
Rate Collapse Response: Rates have collapsed, prompting a focus on reducing costs and suspending unprofitable services.
Industry Dynamics: Market conditions can vary across trade routes, and adjustments are made accordingly.
Future Growth and Partnerships: The company is considering growth targets for 2030, with a willingness to explore partnerships, but there's no immediate urgency for mergers and acquisitions (M&A).
3- Shipping Stocks Outperforming S&P 500 ETF
Cyclical Nature: Success in shipping stocks depends on timing due to their highly cyclical nature.
Short-Term Winners: LPG, midsize crude-tanker, and select container-shipping shares have done well in 2023.
Matson's Exceptional Performance: Matson's stock rose 41% YTD, surpassing the SPY's 18% gain, despite a challenging sector outlook.
Danaos' Strong Performance: Container-ship lessor Danaos Corp saw a 27% increase, outperforming the broader market.
Resilience Over Four Years: Most container shipping stocks still outpace the S&P 500 ETF over four years, with Danaos showing remarkable growth, up 832% since August 2019.
4- Ship Pays $2.4 Million to Bypass Panama Canal Queue
Panama Canal experiences congestion due to drought, resulting in a queue of vessels waiting to cross.
A ship paid a record fee of $2.4 million, in addition to a standard $400,000 transit fee, to bypass the congestion.
Drought has reduced canal water levels, leading to fewer vessels with reduced cargo capacity and a growing backlog.
Panama Canal Authority conducts auctions for vessels seeking to expedite their passage, but costs have significantly risen.
The total cost, including the standard fee, approaches $3 million, setting a record high for expedited ship passage.
5- COSCO &OOCL Shine Bright: Q2 2023 Earnings Surge
Strong Performance: COSCO, OOCL, and Wan-Hai impress with improved 2Q 2023 earnings despite market challenges.
Leaders in Earnings: COSCO and OOCL lead the earnings charts, outperforming peers despite lower revenue and freight rates.
Impressive Margins: COSCO and OOCL achieve EBIT margins over three times higher than their competitors at 31.8% and 24.8%.
Effective Cost Management: COSCO reduces equipment and cargo transportation costs by $5.7 billion, rebounding from earlier setbacks.
6- Hapag-Lloyd Outshines All: Tops 2022 Profitability List
Hapag-Lloyd's Outstanding Performance: Hapag-Lloyd leads the pack, achieving over £1 million ($1.25 million) per employee in 2022 profits.
Shell Falls Behind: Energy giant Shell takes second place, with significantly lower profit per employee compared to Hapag-Lloyd.
Maersk in Sixth: Maersk, another shipping company, secures the sixth spot with £233,163 per employee.
Container Shipping Triumph: The entire liner shipping sector surpasses internet giants (FANG) with a total of $208 billion in EBIT.
Optimistic Outlook: Despite challenges, experts anticipate a bright future for container shipping in the coming year.
7- Ship Fuel Costs on the Rise
Past Worries: Four years ago, shipping faced cost concerns due to stricter fuel regulations (IMO 2020).
Current Situation: Ship fuel expenses are increasing again, especially for low sulfur fuel oil (VLSFO).
Impact on Shippers: Higher VLSFO costs are a bigger part of overall shipping expenses.
Recent Data: VLSFO prices have gone up 16% since June, and carriers are raising bunker adjustment factors (BAFs).
Scrubber Issues: Ships with scrubbers face challenges as VLSFO-HSFO price difference falls below $100 per ton, making scrubber investments less attractive.
8- Big Jump in Ship Sizes on Far East-N. America Trade
Notable Growth: Ship sizes on the Far East-North America route have surged by 17% in the past five years, with ships now averaging 9,622 TEU compared to 8,225 TEU five years ago.
Far East-Europe Dominance: The largest vessels are mostly on the Asia-Europe route, except for a few exceptions.
Surprising Trend: Despite new 24,000 TEU ships, Far East-Europe vessel sizes have only grown by 6.1% since 2018, below the global fleet average.
Geopolitical Impact: The average size on Asia-Europe decreased due to the war in Ukraine, leading to port service closures by major carriers.
9- Asian Carriers Lead with Mega-Sized Vessels
Asian Dominance: Asian carriers, led by HMM with an average vessel size exceeding 11,000 TEU, dominate large vessel sizes.
Trade Route Focus: The largest carriers operate in significant East-West trade routes, like Asia-Europe and Asia-North America.
European Perspective: European carriers such as MSC, Maersk, and CMA CGM focus more on regional trades with smaller ships.
HMM's Growth: HMM achieved a remarkable 91.7% increase in its average container vessel size, thanks to the delivery of large mega-max and neo-pana-max ships.
10- Carriers’ Capacity Management to Boost Rates on China-US West Coast Route
Rates Surge: Freight rates from China to the US West Coast jumped 73% since June to $2,200 per FEU.
Long-Term Contracts: Rates for long-term contracts, starting in August, are up 25% at over $2,000 per FEU.
Capacity Cut: Carriers reduced capacity by 14% in July and August, compelling shippers to book amid uncertain demand.
Golden Week Prep: Carriers are managing capacity closely for China's upcoming Golden Week holiday.
Blanked Sailings: Blank sailings are planned in September and October to avoid overcapacity and protect rates.
