



Container shipping profitability is expected to improve in 2015, despite record vessel deliveries, driven by lower unit costs, according to the latest edition of the Container Forecaster, published by shipping consultancy Drewry.









The global fleet is expected to grow 7.2% in 2015, a faster pace than demand which is forecast to expand at a more modest 5.3%. However, despite these headwinds, Drewry forecasts that industry unit costs will continue to decline at a faster pace than average freight rates, so raising profitability.

Bunker costs fell 50% year-on-year in the final quarter of 2014 and anecdotal evidence suggests that carriers intend to increase annual contract rates on all trades with their key BCO (beneficial cargo owner) clients this year.

“Carriers are winning the battle between rates and costs,” said Neil Dekker, Drewry’s director of container research. “However, there are issues such as port congestion which are both costly and outside the direct control of carriers.”





Drewry estimates that the industry will finish 2014 in the black, thanks mainly to the contributions of a handful of lines such as Maersk and CMA CGM, while others will have lost money. More carriers are expected to be profitable in 2015, provided that a number of tailwinds prevail. These include: continuing carrier focus on vessel deployment; fuel costs remaining low; recovering demand; successful outcome of annual BCO contract negotiations; and new operational alliances delivering greater market stability.

This is a lot to ask for from an industry with a poor track record of profitability. But there are signs that carriers are starting to believe in themselves and are backing up their positive rhetoric with actions. Network planning, slow steaming and the introduction of the mega- alliances will all help the drive towards a more profitable industry.

















“Despite several factors that could derail some of the more positive influences, this could be the year that carriers start to turn the corner in terms of operational profitability,”said Dekker.

Container carriers have a habit of undoing good work with poor discipline. But the influences that are shaping the industry right now (including recent consolidations) prove that carriers have pushed profitability and value for money up the board room agenda.



“With a forecast 1.7 million of teu due to be delivered to the global fleet this year, 2015

Cointainer shipping freight rates on the Asia-North Europe jumped almost 25% today as a slew of general rate increases (GRIs) introduced by carriers took effect. The Shanghai Containerised Freight Index’s Shanghai-North Europe leg stood at $1,256 per teu this morning, an increase of 24.6% from last week’s level of $1,008, and forwarders in the trade report that carriers are becoming increasingly “bullish” in the run-up to Chinese New Year. Although the rate increases are nowhere near the planned $800-850 figures previously announced by carriers. G6 alliance partner OOCL increased its rate for a high-cube 40ft by $300 to $2,300 from Chinese base ports. Meanwhile, K Line’s rate for a high-cube 40ft today stood at $2,554 and Mediterranean Shipping Co at $2,900 on the same leg. In an effort to make up the shortfall between hoped-for and actual rate increases, carriers have announced more GRIs and peak season surcharges (PSSs) for the beginning of next month. OOCL has confirming a PSS of $350 per teu on the trade, K-line a further GRI of $300 per teu, while MSC and MOL have also announced GRIs of $600 per teu, all to take effect on 1 February. “Space is starting to get slightly tighter from certain origins,” one forwarder told The Loadstar. However, Freight Investor Services container derivatives broker Ruichard Ward said: “Although utilisation is reportedly in the 90%-plus range, sentiment is more bearish than it was 12 months ago, when many shippers struggled with the huge spike in rates just before the Chinese holiday period.” China will effectively close down for its annual two-week holiday on 19 February, and carriers are beginning to reveal details of cancelled sailings during the hiatus. OOCL said today it would void its EMX service between Asia and the East Mediterranean and Black Sea in week nine, which begins on 23 February. Meanwhile, Alphaliner reported this week that the idle fleet was also beginning to grow in anticipation of reduced demand. “The idle containership fleet has increased slightly in the last two weeks, as the impact of the service withdrawals for the winter slack season is starting to be felt,” it said. “Five ships of above 7,500 teu are currently unemployed, out of a total of 116 ships of over 500 teu that are recorded to be idle as at 12 January 2015.

“However, at 239,500 teu, the idle fleet remains at the lowest recorded level for the month of January since 2009,” it added.





COPENHAGEN, Jan 26 (Reuters) – Shipping freight rates for transporting containers from ports in Asia to Northern Europe jumped 24.6 percent to $1,256 per 20-foot container (TEU) in the week ended on Friday, data from the Shanghai Containerized Freight Index showed.

The rise in freight rates on the world’s busiest route was a result of a general rate increases announced by the global leader Maersk Line and other major container shipping companies earlier in January.

In the week to Friday, container freight rates rose 7.4 percent from Asia to ports in the Mediterranean, fell 1.2 percent to ports on the U.S. West Coast and were unchanged to ports on the U.S. East Coast.

Ships owned by Maersk Line, a unit in Danish oil and shipping group A.P. Moller-Maersk, carry around one fifth of all containers transported from Asia to Europe. (Reporting by Ole Mikkelsen; Editing by Simon Johnson)