Malta Shortsea Promotion Centre
                 
                 
 Home    Sitemap    Contact  
 
 
 
 30/04/2019 - Copenaghen - The European Maritime Safety Agency’s, EMSA, service of Remot... ...
 
[Read More]
 
 30/04/2019 - At the beginning of April the Gothenburg Port Authority launched a digital solut... ...
 
[Read More]
 
View All News
 
Home Mission Services Statistics Members Contact Us
 

News & Events

   
   

Container lines power through headwinds

Date: 30/04/2019

The United Conference on Trade and Development (UNCTAD), in its recently published Review of Maritime Transport 2018, announced that seaborne trade expanded by a healthy four per cent in 2017, the fastest growth in five years. The projections on average annual growth rate in total volumes of 3.8 per cent up to 2023.

This is indeed good news for the container liner operators after years of gloom and meager increases in container traffic. In 2010 shippers had the luxury to choose from as much as 25 carriers on the important Far East to Europe trade. After nine years in which we passed through a recession, and for one reason or another, we are now down to 10 lines in operation on this trade.

Furthermore due to consolidation in the trade and the reliance of ultra large container vessels the shipper can now choose to ship his cargo on three alliances effectively three services.

Since the demise of Hanjin the market has seen a significant level of consolidation in the container shipping sector through mergers, acquisitions and the formation of the big three alliances.  According to the UNCTAD’s statistics, in January 2018 the top 15 container lines accounted for just over 70 per cent of all container ship capacity. Six months later, the top ten lines controlled 70 per cent, reflecting the completed integration of the latest mergers.

Overall the risk of another bankruptcy among the major container lines remains pretty low, despite the financial worries they have had of late. This is due to the fact a lot of the lines, especially those hailing from the Far East, have a lot of government backing. So there is a safety blanket that a lot of these shipping lines have no matter how bad their P&L might look.

Going forward the biggest challenge for the shipping lines is the implementation of the IMO’s 0.5 per cent Sulphur cap as from January 2020. This will invariably increase fuel costs to the shipping lines. Therefore how successful the lines will be to implement fuel surcharges in their freight might be critical to their overall survival going forward.

However, once we get into 2020, there is obviously likely to be a very big premium in terms of switching to low-sulphur fuel, and probably some shipping lines might not be viable anymore. If those ships are scrapped, it could change the whole supply/demand balance and the market might be a bit stronger.

The list of the world’s top 10 container shipping companies ranked in order of the 20-foot equivalent unit (TEU) capacity of their fleet according to the United Nations Conference on Trade and Development as of June 1, 2018.

The stated number of container ships includes both company owned and chartered vessels.

Source: Times of Malta ,Friday, April 5, 2019, by Michael Callus, CEO of the Malta Maritime Forum.

 
   Copyright 2019 | Malta ShortSea Promotion Centre | Web development