By Kyunghee Park (Bloomberg) — Container shipping companies are bracing for a challenging year — they will have more space available for carrying goods than the amount of cargo that’s out there.
Corrine Png, chief executive officer of research firm Crucial Perspective, estimates freight-carrying capacity on container ships will rise 5.9 percent this year, outstripping demand growth for the first time since 2015.
That’s largely because more than 40 huge container vessels ordered at least two years ago are ready to be delivered for service, creating an abundance of ship stowage. With some of the space expected to be left empty, container lines could be forced to charge lower fees for shipping goods, even as they try to overcome years of accumulated losses in an industry downturn that has seen at least one company collapse.
More than 90 percent of global trade is transported by sea. The five charts below show what’s in store for shipping companies.
1. More space to carry goods: As more large vessels are delivered and put into service in 2018, ships’ cargo-carrying capacity is expected to expand the most in three years.
2. There could be more ships and even more stowage: Some container lines could take advantage of currently low shipbuilding prices to order more vessels, Png says. As history has shown, sea-freight fees tend to be squeezed when the ship orderbook expands, due to concern there will be an excess of space.
3. Asian and European buyers spend the most: Companies need to raise a combined $144 billion to take delivery of all vessels this year. Of that amount, 73 percent will come from buyers in Asia and Europe.
4. Bigger vessels will be in demand: Container ships are estimated to account for 98 of this year’s orders across vessel types and 120 for next year. Overall, the number of ships on order is expected to rise 54 percent to 662 this year and to 820 in 2019, said Park Moo-hyun, an analyst at Hana Financial Investment Co. in Seoul.
5. Most are crude oil and dry bulk ships: Crude tankers and dry bulk carriers make up more than 60 percent of total deliveries scheduled for this year, and container ships account for 19 percent. Hana Financial’s Park sees a “steady increase” in demand for large container vessels that can each carry more than 15,000 boxes.
By Julian Lee (Bloomberg) Moscow’s use of the tankers sanctioned for their involvement in the Russian oil trade is accelerating, with close to one-third of the blacklisted vessels back at work....
By Gautam Naik (Bloomberg) After fearing the worst from Hurricane Milton, investors in catastrophe bonds appear to have sustained losses well below those predicted as recently as Wednesday. Estimates that had...
Oct 8 (Reuters) – Former Amazon.com Consumer CEO Dave Clark said on Tuesday his new software supply chain management startup Auger has raised over $100 million in private equity funding from Oak HC/FT and...
October 8, 2024
Total Views: 1011
Why Join the gCaptain Club?
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.