⚓ Your Weekly Maritime News - 16
Ahoy, Sea Lovers! 🚢
Welcome to the grand adventure of Maritime Analytica's weekly odyssey, where we navigate the intricate waters of container shipping, bringing you the latest industry news and updates that will keep you well-informed! 🌊
Prepare to dive deep into the enchanting ocean of maritime insights, where there's always more to discover and explore. Join us on this exciting journey! 🔍
Today's Wisdom from the Waves; 🌊
"All of us have in our veins the exact same percentage of salt in our blood that exists in the ocean, and, therefore, we have salt in our blood, in our sweat, in our tears. We are tied to the ocean. And when we go back to the sea, whether it is to sail or to watch it, we are going back from whence we came." - John F. Kennedy
🚢 Navigating Knowledge: Container Shipping Quiz Time! 🚢
*Last Week’s Answer: SOLAS (Safety of Life at Sea)
1- Is this vessel the future of shipping?
2- Hapag Lloyd CEO Rolf Habben Jansen: Shipping Faces Rough Seas
"Shipping remains the most cost-effective and eco-friendly mode of transport, but the industry is highly volatile and cyclical."
"After some exceptional years, we have returned to rougher seas, with low freight rates and imbalances between supply and demand impending."
"Aspects such as maintaining a competitive cost position, making sensible investments for better market access, and delivering high quality will become even more important."
"And so will decarbonization – despite rising funding costs and the question of alternative fuel availability, the sector must prioritize cleaner practices and lower-emission transport solutions. “
3- Container Shipping Faces Grim Future with $15 Billion Loss in 2024
Drewry predicts a $15 bn industry-wide loss in container shipping for 2024.
Freight rates are expected to drop by 60% in 2023, followed by a 33% decline in 2024.
The challenge of maintaining rates above costs is expected to persist in the coming years.
Supply and demand imbalances are at an all-time low, with a 6.4% supply growth versus a 2% demand growth in 2024.
Carriers struggle to restore equilibrium, with options like vessel demolitions and slow steaming deemed insufficient to rebalance the market.
🚢 Cast Your Vote: Container Shipping Insights Poll! 🚢
Last Week's Insight: 35% of our followers believe that Streamlining Logistics and another 35% believe that Reducing Carbon Emissions must change to ensure the future sustainability of the container shipping industry.
4- Stricter Regulations Drive Shipbuilding Demand-Prices
New regulations drive demand for container, gas, and car carrier vessels.
Dry & liquid bulk vessels are expected to follow suit due to regulations.
Analysts anticipate sustained high prices until demand softens.
Container ship prices rise despite concerns of over-capacity.
Regulations push owners to replace older ships, accelerating the orderbook.
5- First War Surcharges for Israeli Ports Amid Conflict
Container rates to and from Israeli ports under scrutiny amid conflict.
Ashdod Port chairman expects no rate increases or surcharges, expressing concerns about potential insurance costs.
South Korean Ocean carrier HMM introduces a war risk surcharge (WRS) on Israel cargo due to deteriorating situation.
HMM's WRS implemented immediately to maintain service.
WRS serves as a response to increased costs associated with the conflict.
6- Freight Carriers' Profits and Inflation – A Closer Look
Freight rates peaked at over 200% higher than in 2019 during 2021-2022.
Combined 2021 and 2022 profits for shipping lines exceeded 400 billion USD.
Carriers' profits, when compared to the value of goods being moved, are relatively small.
IMF reports global inflation increased from 4.7% in 2021 to 8.7% in 2022.
Carriers' added profits contributed just 0.9% to global inflation from 2020-2022, with a potential deflationary impact in 2023.
7- Cooling Off: Reefer Container Production Drops in 2023
Reefer container production in 2023 falls to 150,000 TEUs from 282,000 TEUs in 2022.
Major manufacturers produced 113,000 TEUs in the first eight months of 2023.
The reefer container fleet is set to slightly increase to 3.58 million TEUs by year-end, with new containers replacing older ones.
Newbuild container prices follow declining charter rates, averaging $1,483 for a standard 40' container in 2023.
Reefer container price variations are smaller, with an expected annual average of $16,360, per Dyna Liners.
8- JIT Port Calls: 5% Emission Cut Potential
JIT port calls in container shipping can cut emissions by 5% (17 million tons of CO2 annually).
PortXchange trials show potential $1,000 savings per ship in fuel costs.
Key ports like Buenos Aires, Moin, Valencia, and Tanger Med offer significant JIT benefits.
Maersk could save €331,323 by implementing JIT in 71 analyzed port calls.
Urgent industry-wide adoption of JIT practices needed for environmental goals.
9- Navigating the Storm: Container Overcapacity May Linger Until 2028
Overcapacity in the container shipping industry may persist until 2028.
An optimistic scenario suggests a 2019-level supply/demand balance by 2028.
Challenges include lower demand growth, modest supply growth, and other factors.
The worst of the overcapacity is expected in 2024.
Rebalancing the market may extend to 2030 or beyond if assumptions aren't met.
10- BRICS vs. G7: A Global Economic Showdown
BRICS adding six new members in 2024, representing over $30 trillion in GDP.
BRICS accounts for about 29% of the world's GDP, while G7 holds 43%.
India's rapid growth contributes to BRICS' catching up to G7.
BRICS expected to further narrow the GDP gap as more nations join.
The battle for global economic dominance continues between BRICS and G7.
