2017 liner market trend outlook

  • Date: Jun 22, 2017
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Market data agency Xeneta’s latest data show that the past three months to negotiate the long-term contract price of Eurasian routes last year, the average tariff of 2.2 times. At the same time, the second quarter tariffs higher than the first quarter 10%. The results of the recent negotiations show that the average contract price on the Eurasian route is $ 450 / TEU higher than last year, while the average contract price on the Trans-Pacific route is $ 300 / FEU higher than last year.

Specifically, in mid-May, the average long-term contract tariff from China’s major ports to major European ports reached $ 1396 / FEU, up 120% from a year earlier. Moreover, the north and south routes tariffs are also rapidly being restored, the momentum of recovery does not lose east-west route.

There is no doubt that the whole collection industry has been in the process of repair after 2016, one of the worst years in the history of the past. One of the evidence is that the contract tariffs made with the customer negotiations rose sharply. As the first quarter of the global capacity supply and capacity growth year on year growth rate of 1% and 4% to 5%, so the capacity supply and demand equation is significantly improved, the first quarter of the continued upward trend in tariffs will continue, the overall 2017 Financial performance will certainly be greatly improved.

Drewry recently reported that the first quarter of this year, although the seasonal market freight rates at a seasonal low, but higher than the same period last year.

Last year, total industry losses were estimated at around $ 3.5 billion, but this year’s industry-wide profit could reach $ 1.5 billion to $ 3.3 billion. The final result is near the lower limit or the upper limit, depending on the degree of recovery.

In recent years, the financial performance gap between the liner companies has become increasingly apparent, and will continue to expand. In 2017, the number of profitable companies should exceed the loss of the company. Relatively successful companies will continue to focus on a few of the most profitable markets.

“Although Drewry is optimistic about the 2017 market, there are two uncertainties that could cause the industry to fall again in 2016,” said Simon Hennessy, senior manager of container research at Drewry Shipping. The abyss, one is the fuel price out of control, the second is in an important route on the price war.

In 2016, container transportation demand increased by 2.2%. To be sure, demand growth in 2017 will be stronger than last year.

In 2016, the transport industry transport capacity growth of only 1.7%, lower than the original estimate of Drew, the main reason is the shipbreaking capacity of 659,000 TEU surge, the second is the new ship factory delayed. Drewry predicts an increase of 2.2% in the capacity of active fleet in 2017. Maersk Line, the fleet of towers and the Greek shipowner, Costamare, postponed the new ship to 2018.

2015 container delivery of new ship orders capacity of 2.1 million TEU, 2016 “high-profile diving”, only 250,000 TEU. In 2017, the new order for container ships so far was almost zero. When will the order come back? Expected never to be very fast.

Even last year, Iran Air China (IRISL) made four 14000TEU new ship contract has not yet final signature.

In the first three months of this year, the Drewry East-West Freight Rate Index fell 20%. But this is not excessive interpretation, as in previous years is the seasonal reason.

In fact, the first quarter of 2017 tariffs higher than the same period in 2016 40% higher than the same period in 2015 by 20%. If compared to the year, the first quarter of this year’s tariff is in a very good state, and 2016 ultra-low tariff is not normal.

Drewry predicts that in 2017 both east and west freight rates or global tariffs will continue to improve, many carriers will therefore turn around. East to east trunk freight rates will increase by 14%, the global tariff will increase 11% to 12%. It is expected that the next report, Drewry will improve the forecast data. Drewry has full confidence that the market has changed the direction of the wind, the carrier once again mastered the tariff set the right to speak.

From the long-term trend since 2013, there is a need for a longer period than the average spot rate, which is not always the case.

In order to maintain the trend of rising tariffs for the most recent period, the carrier has a “combined boxing” that suppresses the supply of capacity, including reducing the age of the scrapped ship, sealing the ship in service and canceling a flight from time to time (ie, Blank flight “). In addition, Hanjin shipping bankruptcy, the main liner company a series of M & A transactions and capacity demand side of the strong rebound in varying degrees to promote tariff increases.

According to Alphaliner’s data, the recovery of the shipping market has been conclusive. As the capacity supply and capacity demand growth rate of 1% and 4% to 5%, so the capacity supply and demand equation is significantly improved, the first quarter of the continued upward trend in tariffs will continue.

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