Since this year, the price of the shipping market has fallen further, almost to the pre-epidemic level. According to the latest data released by the Shanghai Shipping Exchange, the comprehensive freight rate index of Shanghai's export containers continued to decline after falling below 1000 points, reaching a new low since June 2020, and the freight rate of most ocean routes continued to decline.
 (Data map of Yantian Port, taken by Song Chunyu)
Although the data is still higher than the average level before the epidemic, the container shipping market is facing a more severe situation in view of the rising comprehensive costs. In the case of weakening maritime demand, the increase in transport capacity brought by the large number of new ships launched can not be ignored. Recently, Maersk and other global shipping companies said that as the market returns to normalization and demand is weak, the company's capacity will be adjusted to meet demand, and give contract customers additional flexibility and space.
A large number of new ships were launched during the year, and the competition in the shipping industry intensified
On February 17, the data released by the Shanghai Shipping Exchange showed that China's export container transport market was still recovering gradually after the "Spring Festival" holiday. Although the volume of goods this week remained positive, the market was still in a state of oversupply; The comprehensive freight index of Shanghai export containers was 974.66 points, down 2.1% from the previous period. At the beginning of last year, the index reached 5109.6 points, and the latest data fell more than 80% from the high point at the beginning of last year.
That week, OOCL welcomed the first 24188TEU (20 foot standard unit) giant container ship in its fleet. This ship is not only the first container ship with a capacity of more than 24000TEU, but also one of the largest container ships in the world. In 2020, OOCL ordered up to 6 24188TEU container ships from Nantong COSCO Marine Kawasaki.
Some insiders are worried about whether the current market demand can satisfy the newly launched large ship. With the weakening of market demand and the continuous decline of shipping prices, the phenomenon of excess capacity of existing container ships continues to emerge. Although some shipping companies around the world cancel new ship orders, industry insiders pointed out that this situation is not common.
A few days ago, Tim Seffett, director of the public relations department of Herbert, the world's fifth largest container shipping company, said in a reply to the reporter of the Securities Times that this year the company will have seven new ships to join the fleet. At present, the plan is still maintained and there is no plan to reduce the shipping capacity. However, the company said that it was also possible to delay the delivery of the new ship. After all, it was related to the huge construction project of the new ship, and the corresponding details were relatively complex. Herbert will continue to optimize the transportation network according to daily needs and continue to provide customers with the best solutions.
The head of media relations in Asia-Pacific region of Maersk, a maritime giant, also told reporters that the company had no plans to cancel the new ship order. The new ship is a part of the company's fleet renewal project, and will replace the existing ships that are close to the scrappage period. Maersk is committed to promoting low-carbon logistics, with the goal of achieving zero carbon by 2040. The company has 19 orders for green methanol-powered ships, and the first will be put into use this year.
The Securities Times learned from Clarkson Research that, according to the statistics of the agency, the number of new shipbuilding orders in 2022 was close to the high level of 1400, with a total of 42.78 million revised gross tons. Among them, the orders of LNG carriers hit a record high, the orders of container ships and automobile carriers continued to be hot, the orders of oil tankers hit a record low, and the orders of bulk carriers were relatively weak. This means that large container ships will usher in centralized delivery. Clarkson research predicts that container ships will deliver about 2 million TEU this year, an increase of more than 90% year on year, and an increase of more than 80% compared with the average annual delivery in 2016-2020.
According to the data of Alphaliner, a Paris shipping consultancy, 362 new ships with a total capacity of more than 2 million TEUs are expected to be launched in 2023, accounting for about 10% of the current global capacity level. Although shipping companies have taken measures such as scrapping, the relationship between supply and demand in the market may deteriorate further this year. In terms of demand, Maersk expects that the growth of the global maritime container market will only be between - 2.5% and 0.5% in 2023.
 (Data map of Yantian Port, taken by Song Chunyu)
The performance of several shipping companies declined in the first month, and Maersk pointed out the risk
Since the second half of last year, affected by weak demand, overcapacity, falling freight rates and other factors, the performance growth of global container liner companies has declined, and the decline has shown an expanding trend. The latest data shows that the revenue of the three major shipping companies in Taiwan, China suffered a sharp decline in the first month of this year, with a decline of more than 50%.
In January, HNA received NT $9.496 billion in operating revenue, down 70.79% year on year. The revenue of Yangming Shipping was NT $12.7 billion, down 64.27% year on year. EVA's revenue was NT $26.24 billion, down 53.83% year on year.
All three companies mentioned that performance changes were related to the decline of freight rates.
The 2022 annual financial report released by Maersk last week pointed out that the global economic growth was weak in 2023 and the major economies were facing the risk of recession. Consumer spending is also expected to slow down, and the massive consumption during the epidemic has led to the risk of correction in the market. Maersk expects that the growth of the global shipping container market will be between - 2.5% and 0.5% in 2023, and the company's EBITDA will fall sharply to between US $8 billion and US $11.1 billion this year.
However, although freight rates have continued to decline since the second half of last year, the overall performance of shipping companies last year is still bright. Maersk's financial report showed that the company's annual performance reached a record high. Affected by the overall high freight rate, Maersk's revenue increased by 32% to US $81.529 billion in 2022, and its net profit reached US $29.321 billion, up 63% year on year; Actual EBITDA was US $36.8 billion, the best in the company's history. OOCL's annual revenue last year was 18.7 billion US dollars, up nearly 20%.
In response to how to respond to the changes in the future shipping market, Maersk said that as the market returns to normalization and demand is weak, the company's transport capacity will be adjusted to meet demand. The company actively cooperates with important customers, gives contract customers additional flexibility and space, and helps to cope with fluctuations in the supply chain. Since the launch of transformation in 2016, Maersk's strategy can provide integrated solutions to achieve smooth and optimized logistics.
The person in charge of Taiping Shipping in Singapore told the Securities Times that the company would continue to expand its Asian service network and better serve ASEAN and RCEP. We will continue to strengthen the market links in Africa, and will launch the Zanzibar Express Line in East Africa in March, making it a shuttle express connecting Kenya and Tanzania. In addition, Taiping Shipping will also actively develop multimodal transport services to provide customers with diversified choices through railway, truck, ship and other means. He Xiaohua, general manager of the public relations and corporate communications department of Taiping Shipping, replied in an email: "We will also strengthen the monitoring of market trends and timely adjust business development strategies."
In terms of new ship orders, Taiping Shipping said that the company ordered a total of 8 LNG dual-fuel container ships from Jiangnan Shipbuilding and Yangtze River Shipbuilding in March and August 2022 respectively. The construction of LNG dual-fuel container ships is an important measure for the company to optimize and update its fleet and achieve the goal of net zero carbon emissions by 2050. At present, these orders are being pushed forward in an orderly manner, and Taiping Shipping will also keep close contact with the two shipbuilding enterprises to maintain communication, so that the new ship can be delivered on schedule as agreed in the contract.
The largest port in the United States "warned" short sellers that the recovery will come
The downturn of the global container transport market is also reflected in the port data. In January, the container throughput of Changtan Port, the second largest port in West America, reached 574000 TEUs, down 28.4% year on year. Mario, executive director of Long Beach Port, said that the port was taking radical measures to meet new challenges. "I am optimistic that we will regain market share. We will promote the development of the project, enhance long-term growth, sustainable operation and reliable commodity transportation."
Los Angeles, the largest port in the United States, is also facing a severe situation. In January, the container throughput of Los Angeles Port reached 726000 TEUs, down 16% from the historical record of the same period last year. Celoka said that global trade was expected to be weaker in the first quarter, especially compared with the record-breaking data last year. "Many factories in Asia have extended the closing time of the Lunar New Year, and retailers continue to promote products to clear inventory. The economic worries caused by inflation remain the top concern of the American people," said Seroka, executive director of the Port of Los Angeles.
Last year, there was a loss of goods to the East Coast of the United States and the Gulf of Mexico in the Port of Los Angeles, and there was a stagnation in the negotiation of labor agreements. However, Seroka said last month that he firmly believed that the port would recover, and even said "Don't short the port of Los Angeles".
In China, Yan Jun, the president of Shanghai Port Group, said earlier that the global economic situation in the new year is facing major challenges. He hoped that the "colleagues of Hong Kong and Shipping" would continue to give insights into Shanghai Port in terms of business innovation, market development, digital development and other aspects, and provide support and assistance to the development of relevant businesses of Shanghai Port and the market expansion of the Yangtze River Delta and Yangtze River Basin. The Group will continue to take the initiative to dock with shipping companies, deepen their all-round and full-function cooperation, work together to improve and improve services, and jointly meet challenges and win-win development.
"The market deviates from the normal situation before 2020, but the market sentiment is not overly pessimistic." Lan Xi, a senior analyst of the Black and Shipping Department of the East Securities Derivatives Research Institute, said in an interview that the current demand has fallen back to the level of 2019. With the end of the Spring Festival and the resumption of work and production, the demand side continues to recover, and the worst may be over. However, at the supply side, the capacity supply is still surplus compared with 2019. For example, the capacity of the U.S. - West route is more than 10% higher than that of 2019, which means that the scale of idle capacity required by liner enterprises is very large.
Lan Xi said that the situation of loose supply was still unsolved in the short term, and the supply situation would be worse with the continuous release of new ship capacity. "The cancellation of orders for new ships is only an individual case". Earlier, there was a rumor in the market that from the second half of the month, the liner will speed up the contraction of transport capacity to increase the freight rate, but it is expected that the actual implementation will be difficult. Compared with the strategy of quantity guarantee, price guarantee is not necessarily a better solution.
Editor in charge: Wan Jianyi
Checked by: Zhao Yan
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