Port of Dover Prepared for Brexit: Drewry
Alternative capacity could be provided by short-sea container services between the UK and EU to alleviate possible congestion at the Port of Dover post-Brexit.The Port of Dover is the cross-channel port situated in Dover, Kent, south-east England. It is the nearest English port to France, at just 34 kilometres (21 miles) away.According to a new study by global shipping consultancy Drewry the Port of Dover had the capacity to cope with moderate Brexit disruption.The earlier study, validated by the Port of Dover, concluded that of the 2.5 million trailers going via Dover, around 20% (i.e.
Will Shipping IPOs Comeback in 2019?
The market for Initial public offerings (IPOs) across the global shipping industry has remained understandably muted in recent years but secondary offerings continue to be an important funding mechanism, according to a recent report from Drewry Maritime Financial Research.Despite low interest in shipping IPOs in the US over the last few years, listed shipping companies continue to raise money through secondary/additional offerings and bond offerings in the US market with Oslo…
Port Dover Faces Brexit Heat
Britain's Port of Dover has the resilience to cope with moderate disruption arising from Brexit and there is latent short sea capacity to absorb significant overflow at the port in the event of capacity constraints, according to an independent study by global shipping consultancy Drewry.Among the political arguments about Brexit and its consequences, there has been a surprising lack of objective and quantitative analysis of the implications for the future of the vital short sea trade between the UK and the EU…
Small LNG Projects Crucial for Market: Drewry
Low prices, abundant supply and an aggressive shift towards cleaner gas for energy generation are creating strong demand for LNG, not just from large buyers, but also from small importers, said Drewry.In its market opinion report, Shefali Shokeen, Senior Research Analyst, Drewry Maritime Research said that small-scale LNG projects (production and regasification capacity of less than 500,000 tonnes per annum) have reduced capex and are suitable for countries with low LNG consumption.For example Gibraltar has set up a small LNG import terminal with a total storage capacity of 5…
Moody's Downgrades Maersk
Moody's Investors Service has downgraded ratings for AP Moller-Maersk after a review of the Denmark-based shipping and oil company. Moody's expressed concerns about lower economic growth and the US-China trade war."The downgrade reflects our expectation that Maersk will face increased market and execution risks and, as a result, operate at a higher leverage than is commensurate with a Baa2 rating for a company in such a volatile and cyclical business as container shipping," said Maria Maslovsky…
Container Shipping Bankruptcy Lends Insight on Potential Fallout from Trade War
Global trade tensions have captured headlines in recent months, as the imposition of a series of tariffs and counter-tariffs by various global trade counterparts has raised questions about the possibility of a trade war. Such development could potentially have an impact on global trade flows, and, consequently, the companies which facilitate international movement of goods.Though the situation is still developing and the final impact is uncertain, Gregory Draco, the Chief U.S. Economist at Oxford, predicted in July that the tariffs would create an 0.1 percent to 0.2 percent drag on U.S. GDP.
Container Shipping a 'Mixed Bag' - Drewry
South Asia container trade with Europe continues to outpace the Middle East, says Drewry in its Container Insight Weekly report.Container shipments in the combined eastbound Europe to the Middle East and South Asia trade performed well in the first quarter, rising by 5.2 percent year-on-year according to Container Trade Statistics. However, that aggregate rate hides two very different performances by the two destinations. CTS reports that inbound traffic to South Asia soared by 18 percent in 1Q18 to reach approximately 410…
Asia-U.S. Trade to Grow 7%
About 500 people gathered at the Long Beach Convention Center for the event, which brings together a panel of shipping and trade experts to offer their perspectives on industry trends and how they affect the San Pedro Bay port complex. One of the panelists, Drewry Maritime Research Senior Quantitative Economist Mario Moreno, predicted Asia-U.S. trade will grow 6.8 percent in 2018, the fastest pace in more than half-a-dozen years. He also estimated the overall U.S. economy will expand 2.8 percent.
Spot LNG Shiping Fleet's Operating Loss US$230m in 2017
The pressure on LNG shipping spot rates will continue for another year on account of strong fleet growth. However, rates should strengthen from 2019 as fleet growth slows and trade remains strong, according to the latest edition of the LNG Forecaster report published by global shipping consultancy Drewry. Spot rates (East of Suez) for modern LNG vessels averaged $33,000pd in the nine months to September 2017, an increase of 5% compared with the same period last year. While current spot rates are enough to cover operating costs of around $15…
DP World Reports 13.5% Container Volume Hike in Q3
DP World Limited handled 52.3 million TEU (twenty-foot equivalent units) across its global portfolio of container terminals in the first nine months of 2017, with gross container volumes growing by 10.0% year-on-year on a reported basis and 9.6% on a like-for-like basis. The third quarter growth rates accelerating to 13.5% year-on-year on a reported basis and 13.3% on a like-for-like basis, ahead of second quarter growth and Drewry Maritime’s upgraded industry estimate3 of 5.5% throughput growth in 2017.
DP World Reports Q2 10.7% Gross Volume Growth
DP World Limited handled 34.0 million TEU (twenty-foot equivalent units) across its global portfolio of container terminals in the first half of 2017, with gross container volumes growing by 8.2% year-on-year on a reported basis and 7.7% on a like- for-like basis, with second quarter growth rates accelerating to 10.7% year-on-year on a reported basis and 10.4% on a like-for-like basis, ahead of Drewry Maritime’s upgraded industry estimate of 4% throughput growth in 2017. The first…
OOCL is 'The Perfect Bride' -Drewry
Orient Overseas International (OOIL) and its container unit OOCL have a good track record for above-average profits in a challenging market and a reputation for being a very well-run company, earning the moniker “The Perfect Bride” by Drewry Maritime Financial Research. Retaining the management team, processes and systems is a wise move and could be of enormous value to Cosco Shipping Holdings (Cosco), Drewry said. OOCL has an owned-fleet of 66 containerships aggregating approximately 440,000 teu.
Drewry Launches Credit Research Services
Drewry Financial Research Services Ltd., the investment research arm of global shipping consultancy Drewry, launched a new credit research service on the global maritime sector. Through this extension to its established maritime equity research offering Drewry is now able to provide a full investment research service which includes in-depth analysis of the credit instruments that underpin corporate capital structure and provide an investment proposition in asset allocation for institutional investors.
‘Returns set for a comeback’, DFRS, Shipping Outlook 2017
In its Shipping Outlook 2017, Drewry Maritime Financial Research benchmarks its shipping investments thesis against “Capital Returns: Investing Through the Capital Cycle: A Money Manager’s Reports 2002-15”, by Edward Chancellor. In a fascinating account, Edward Chancellor covers the “Capital Cycle”, predicated on investment strategies employed at Marathon Asset Management. In this year’s market outlook we identify key tenets under the “Capital Cycle” investing approach; having…
DP World Partially Monetizes Canadian Assets
DP World will partner with a Canadian pension fund in a $3.7 billion investment vehicle that primarily looks at brownfield projects in investment-graded countries, says Drewry Maritime Equity Research. The terminal operator will retain operational control of the fund with 55 percent stake, after seeding it with two west coast Canadian terminals (Prince Rupert and Vancouver). The pension fund Caisse de depot et placement du Quebec (CDPQ) will plough $640 million for the remaining 45 percent stake. Hence, the total start-up capital for the investment vehicle is $1.42 billion.
Oversupply Remains - Drewry
The withdrawal of Hanjin tonnage has not been enough to rectify the trade’s supply-demand imbalance and headhaul ship utilisation is lower compared to other major East-West markets. Westbound volumes rose by 1.8% in the third quarter and the growth rate for the year to date is now registering 2.9% (see Figure 1). Asian exports shipped to the West Mediterranean (including North Africa) grew by 2.8% between July and September, while traffic to the eastern sector of the trade only expanded by 0.8%.
No recovery for Container Traffic in sight - Drewry
Asia to West Africa container traffic fell by 19% in the third quarter; the end-year result will not be much better. The IMF’s latest World Economic Outlook, published last month, described “multispeed” growth for sub-Saharan Africa economies with the divide between the haves and have nots hinging on different nations’ exposure to commodities. The biggest West African economies of Nigeria and Angola are struggling to adjust to lower oil revenues with the former expected to see GDP contract by 1.7% this year and the latter to flat-line.
Record Containership Demolitions has suppressed Fleet Growth - Drewry
A record year for containership demolitions in 2016 has helped suppress total fleet growth close to the rate for demand. To repeat that feat the scrapping record will need to be smashed again, and again. There are multiple ways to measure the vitality of the container industry, from looking at port and trade volumes to carrier income and balance sheet statements. Another is to look at the average age of containership demolitions. Generally, the earlier that owners decide to cut short the life cycle of their steel assets the more downbeat they are of their future revenue earning potential.
J Lines’ Merger is All About Scale and Survival
The announcement that three Japanese shipping groups will merge their liner shipping businesses is further evidence of survival M&A sweeping the industry according to global shipping consultancy Drewry. This morning Kawasaki Kisen Kaisha Ltd. (K-Line), Mitsui OSK Lines (MOL), and Nippon Yusen Kabushiki Kaisha (NYK) announced their agreement, subject to resolution by the board of directors of each company and shareholder/regulatory approval, to establish a new joint-venture company and to integrate their container shipping operations.
Ready for take-off? - Drewry
The recent rally in Asia to Europe spot market rates has improved carriers’ chances of securing higher 2017 contract rates. How much extra will shippers have to fork out? It has been another typically volatile year as far as the spot freight rate market (i.e. rates with a validity of up to 30 days) is concerned with the weekly ups and downs once again being most obvious in the high-volume westbound Asia to Europe trade. Table 1 shows that in many respects 2016 has thus far played out very much like 2015 with very little difference in regards to the average weekly rate…
Drewry Finds Risk of Carrier Failure Still High
Drewry’s Z-score carrier financial stress index sunk to its lowest ever point following the first-half 2016 results. After Hanjin’s bankruptcy shippers are demanding more financial transparency from carriers. There is still much work to be done to clean up the logistical chaos created by Hanjin’s bankruptcy, but even so there are lessons from the sorry mess that need to be learned to avoid a repeat occurring. Firstly, all stakeholders must understand that no carrier is too big to fail. The hitherto expectation that some white knight would rescue an ailing carrier has been erased forever.
Freight Rates in Europe-ECSA Trade Continue Declines
Container volumes from North Europe and the Mediterranean to the East Coast of South America have now fallen in 26 of the previous 28 months, with the latest statistics from Datamar showing that shipments fell by 8% year-on-year in July. It is the smaller Med to ECSA trade that continues to experience the largest fall-off in volumes with the Datamar figures showing that exports from the Med were down by 12.2% Y/Y after seven months of 2016 to 117,500 teu; versus a decrease of 8.8% for North Europe exports to 306,400 teu.
Wave goodbye to $50 bln - Drewry
Container industry revenues are contracting faster than carriers can cut costs. First-half results so far suggest sales are down by around 18%, increasing the pressure to reduce costs. The container shipping industry is currently enduring a severe revenue contraction that is placing carriers under enormous pressure to squeeze more savings wherever they can and is driving the latest round of M&A activity. The first-half 2016 financial results that have been published so far from a handful of major carriers paint a very depressing picture for the industry.