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Container Shipping 2015 Market Outlook Web:  2nd China Shipping Innovation Conference 9 January 2015.

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Presentation on theme: "Container Shipping 2015 Market Outlook Web:  2nd China Shipping Innovation Conference 9 January 2015."— Presentation transcript:

1 Container Shipping 2015 Market Outlook Web:  2nd China Shipping Innovation Conference 9 January 2015 Shanghai

2 ALPHALINER Containership Market Outlook © Alphaliner – Contents not to be reproduced without permission China Shipping Innovation Conference : Jan 2015 Evolution of container ships – the first 60 years Page 1 First generation Converted and semi- container ships Second generation Cellular containerships Third generation Panamax containerships Fourth generation Post Panamax containerships Fifth generation Very Large containerships Sixth & seventh generation Ultra Large containerships & wide-beam eco-ships

3 ALPHALINER Containership Market Outlook © Alphaliner – Contents not to be reproduced without permission China Shipping Innovation Conference : Jan 2015 New vessel deliveries expected to reach new record Page containership deliveries will be at a record high – 2014 deliveries reached 1.465m TEU - almost a new record (6.3% growth) – But 2015 deliveries expected to exceed 1.80m TEU (7.9% growth net of scrapping) – >10,000 teu vessels make up over half (64%) of planned deliveries – Slippage will be minimal in 2015 (most slippage in < 5,100 teu size or 12% of planned deliveries)

4 ALPHALINER Containership Market Outlook © Alphaliner – Contents not to be reproduced without permission China Shipping Innovation Conference : Jan 2015 Scrapping rate slowing Page 3 Scrapping peaked in 1H 2014 (290,000 teu) but have slowed in 2H 2014 (98,000 teu) – Initial projection of 500,000 teu to be scrapped in 2014 – Final scraps reached only 388,000 teu - lower than the 442,000 teu scrapped in scrapping level expected to be lower than 2014 China’s scrapping subsidies will have limited impact in 2015

5 ALPHALINER Containership Market Outlook © Alphaliner – Contents not to be reproduced without permission China Shipping Innovation Conference : Jan 2015 Idle fleet Idle containership fleet at 3 year low at 200,000 teu – Lowest idle level since 2011 at 1.1% of total fleet – Driven by high scrapping rate & higher demand on E-W/Intra-Asia trades – Recent port congestion issues have also led to higher demand for ships Low idle fleet will reduce scrap rate But limited impact on charter rates Page 4

6 ALPHALINER Containership Market Outlook © Alphaliner – Contents not to be reproduced without permission China Shipping Innovation Conference : Jan 2015 Freight market link to charter market broken down Page 5 Pre-2009 : freight rate index closely correlated to charter index Post-2009 : correlation has broken down due to supply overhang Freight market recovery will precede charter market recovery

7 ALPHALINER Containership Market Outlook © Alphaliner – Contents not to be reproduced without permission China Shipping Innovation Conference : Jan 2015 Demand & Supply remain imbalanced Page 6 Demand growth recovering – 2014 (f) at 4.9% vs 3.0% in 2013 (based on top 30 ports volume) – But recovery is also imbalanced with some sectors very weak (eg South America) and uncertain (eg Eurozone) But supply growth continues to trend above demand – 2014 gross supply growth at 6.3% – But active supply growth (adjusted for idle capacity) was 10.0% – Rates currently sustained partly due to port congestion issues especially in US West Coast – Impact of extra slow steaming is low since 2013, could be reversed with low bunker prices

8 ALPHALINER Containership Market Outlook © Alphaliner – Contents not to be reproduced without permission China Shipping Innovation Conference : Jan 2015 Slow steaming as capacity management tool Page 7 Total capacity absorbed by slow steaming is estimated at 1.3 million TEU or 7% of current fleet With bunker prices at $300/ton, slow steaming is no longer a cost saving strategy But reversal of slow steaming will take time

9 ALPHALINER Containership Market Outlook © Alphaliner – Contents not to be reproduced without permission China Shipping Innovation Conference : Jan 2015 Main issues in 2015 – Record supply growth/New Alliances & Impact of lower fuel price Page 8 FE-Europe services rationalised CKYHE Alliance launched G6 coverage extended Another round of ULCS vessel orders What happens to freight and charter rates? Service rationalisation options limited New 18K vessels delivered Supply overhang worsens Freight rates crash G6 formed by GA/NWA carriers P3 Network announced Fresh round of ULCS vessel orders Maersk orders ‘Triple-E’ ships ‘Daily Maersk’ launched P3 Network rejected by China 2M Alliance announced Ocean 3 announced Impact of lower bunker price? 2M & O3 launched

10 ALPHALINER Containership Market Outlook © Alphaliner – Contents not to be reproduced without permission China Shipping Innovation Conference : Jan 2015 No evidence that Alliances lead to market stability 1985 Alliances/Consortiums 2015 Global Alliances 2M Maersk MSC TRIO OCL Ben Line Hapag-Lloyd MOL NYK Independents Maersk Evergreen COSCO Yang Ming CKYHE COSCO K Line Yang Ming Hanjin Evergreen G6 APL Hapag-Lloyd HMM MOL NYK OOCL O3 CMA CGM CSCL UASC (Hamburg Sud) ScanDutch Nedlloyd CGM EAC Brostrom MISC ACE K Line OOCL NOL FBS KSC Choyang TRIO OCL Ben Line Hapag-Lloyd MOL NYK Independents Maersk Evergreen COSCO Yang Ming ScanDutch Nedlloyd CGM EAC Brostrom MISC ACE K Line OOCL NOL FBS KSC Choyang Acquired by other carriers Exit liner business Haven’t we seen these before? Past Alliances proved to be fundamentally unstable. Can the new alliances last? Page 9

11 ALPHALINER Containership Market Outlook © Alphaliner – Contents not to be reproduced without permission China Shipping Innovation Conference : Jan deliveries by carrier Page 10

12 ALPHALINER Containership Market Outlook © Alphaliner – Contents not to be reproduced without permission China Shipping Innovation Conference : Jan 2015 End Please send any queries to Page 11 Alphaliner clients include the following top shipping lines :


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