Container Carrier Rate Wars Intensify

Drewry
Sunday, May 05, 2013

Ocean carriers cannot afford to operate services from Asia to Europe at rates which are between 25% and 30% lower than in January, says Drewry.

Although the recent collapse of rates was excessive, it will not be reversed until carriers withdraw at least two more loops to North Europe – preferably before the peak season, considers Drewry in its latest edition of 'Container Insight'.

Last week’s dramatic escalation of the rate war between Asia and Europe appears to have been partly triggered by ocean carrier concerns over future cargo volumes, not just declining load factors. According to the IMF’s latest prediction two weeks ago, the Eurozone’s economy will now decline by 0.3% in 2013 instead of the 0.1% fall previously forecast, and the UK’s will grow by only 0.7% instead of 1%.

This means that overall cargo growth to Europe is less likely, which puts ocean carriers in a precarious position. According to Drewry’s latest analysis of the this year’s newbuild programme, there were still 38 out of 45 vessels over 10,000 teu due for delivery at the beginning of April. Assuming these replace remaining 8,000-9,000 teu vessels still operating between Asia and Northern Europe, effective westbound capacity will be increased by over 5%.

The fact that some carriers have been discounting rates heavily is partly understandable, therefore. That said, says the report, the carriers were clearly agitated before for other non supply-demand related reasons, as evidenced by the decline in rates since January, so the IMF’s news probably only poured petrol onto the fire.

Source: Drewry

Maritime Reporter June 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

ClassNK Holds LNG Fuel Technologies Seminars

ClassNk held LNG-Fuelled Vessel Technologies seminars in Shanghai and Singapore on 22 July and 24, July 2014, respectively. With the industry looking to adopt

USCG Change of Command in Galveston

A Coast Guard lieutenant commander and graduate of Hastings High School in Houston, took command of Maritime Safety and Security Team Galveston during a ceremony in Galveston Thursday.

Miller Rejoins TITAN as Salvage Master

Captain Stuart Miller has rejoined Crowley Maritime Corporation’s TITAN Salvage operations team as salvage master, bringing with him over 30 years of worldwide,

Finance

Canal Project Slows Panama Economy Growth

Panama's economy expanded in May at its slowest pace since 2009 as major public works projects, including an expansion of the Panama Canal, slowed or wrapped up,

Gas Prices Help Offset Statoil's Output Drop

Statoil's second quarter 2014 net operating income was NOK 32 billion, a decrease of NOK 2.3 billion compared to the second quarter of 2013. Adjusted earnings were NOK 32.

Asia VLCC Rates Could Nudge Higher on Activity

Rates for very large crude carriers (VLCCs) on key Asian freight routes could hold steady or gain next week as charterers seek to complete their vessel chartering

Container Ships

Hamburg Süd to Acquire CCNI Liner Service

Compañía Chilena de Navegación Interoceánica S.A. (CCNI) with headquarters in Valparaiso, Chile, and Hamburg Südamerikanische Dampfschifffahrts-Gesellschaft KG (HSDG) with headquarters in Hamburg,

Samudra Containership Rationalisation Hits Revenues

Diversified Singapore-based containership owners Samudra Group reports registered revenue of USD 96.9 million for the second quarter ended 30 June 2014, a 7.6% decline from USD 104.

MES Gets First Order for ME-GI Marine Engine

Mitsui Engineering & Shipbuilding Co., Ltd. (MES) has received the first order of electronically controlled gas injection diesel engine (ME-GI) for MES. MAN B&W 8S70ME-C8.

 
 
Maritime Standards Naval Architecture Offshore Oil Pipelines Pod Propulsion Port Authority Ship Simulators Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1362 sec (7 req/sec)