Container Shipping: Slow growing demand is a constant challenge

Container Shipping: Slow growing demand is a constant challenge
20/11/2018

Some 13.7 million TEU were shipped globally in September, bringing the full year total up to 125.2 million TEU. While that is an improvement of 4% for both the month (year on year) and year to date, the growth rate has been slowing for the past six months (source: CTS).

We have seen solid growth rate on the Far East to Europe trade lane during the peak season. Volumes reached an all-time high in Q3 – 6% higher than in Q2-2018, and 2.5% more than in Q3-2017. For the volumes being shipped year-to-date, demand nevertheless remains very low, growing by just 1.7%.

The other significant long-haul and high-volume trade lane, from the Far East to North America, was much stronger, growing 7% from Q2-2018 and 4.8% from Q3-2017.

The impact of the trade war is also reflected in the latest container shipping data. Global demand is down from Q2 to Q3-2018 by 1.5%. Notably, both European and North American export volumes decreased from the second quarter to the third.

In the largest market of them all in volume terms, Intra-Asian volumes were down by 3.8% in Q3 from Q2 but remain up by 4.6% for the year-to-date.

While spot freight rates out of Shanghai to the US East Coast (USEC) and US West Coast (USWC) have clearly improved in the third quarter, the full year has been quite solid too – up 6.4% and 8.4% respectively. There is a similar story for the more-inclusive China Containerized Freight Index measurement – which also takes long-term contractual rates and more ports into account – with USEC up by 1.3% and USWC by 2.8%.

For spot rates on the Far East to Europe trade lane, it’s been a bad year. On average, a TEU was being transported halfway across the globe on an ultra large containership for just USD 825; at the same time last year, it was USD 898 per TEU. A loss-making and worse level year to date in 2018.

On 24 September, a further 22.4 million tonnes of seaborne containerised goods were impacted as the US implemented tariffs on a USD 200 billion list of goods; that amounted to a further 2.24 million TEU. In total, 3.6 million TEU (10 tonnes/TEU global average) are now officially affected by the trade war.

At BIMCO.org you can always find updated news on how the trade war is affecting the main shipping sectors.
Fleet news

Not since April and September of last year have we seen a similar level of containership demolition. Not that its high in absolute terms, but alone it almost doubles the amount of tonnage leaving the fleet in 2018. Eighteen ships of a combined 33,804 TEU suddenly matter. A 2004-built Panamax stands out, with the rest being 1990s-built feeders with an average capacity of 1,800 TEU.

As the shipyards are generally getting less busy, slippage of the containership order book has also reduced. BIMCO now expects just over 1.3m TEU of new-built capacity to be delivered. This will bring the annual fleet growth in 2018 up to 5.8%, with a year-to-date expansion of 5.4%.

more...https://www.hellenicshippingnews.com/container-shipping-slow-growing-dem...