Although shipping lines are starting the year with higher spot rates and lower bunker fuel costs than a year earlier, they still face strong headwinds from weak demand and the record amount of new ship capacity scheduled for delivery.
With spot rates that are 26 percent higher year-over-year as measured by the Shanghai Containerized Freight Index and bunker fuel that is 8 percent lower, the share prices of container shipping companies have surged by 18 percent since the beginning of December, based on Alphaliner’s index of 17 main publicly listed liner companies.
But carriers still have to cope with the highest amount of new capacity ever recorded, which is expected to boost total container fleet capacity by 9 percent, or 1.75 million 20-foot-equivalent units, after any potential scrapping, Alphaliner said in its weekly newsletter.
The new ships, which are mostly in the super-post-Panamax sizes that will be deployed on the Asia-Europe trade, will be delivered at a time when the main east-west trades are suffering from falling demand in the European and U.S. markets.
Far East-to-Europe headhaul cargo volumes shrank by 5.0 percent in 2012 while trans-Pacific volumes declined by 0.4 percent, based on preliminary 2012 cargo volume estimates by Alphaliner.
“The two key trades are expected to grow by only 1.0 percent and 1.6 percent, respectively, in 2013 from the low base in 2012, with demand growth remaining well below the projected overall supply growth,” the French consulting firm said.
The Journal of Commerce
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