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Sunday, September 27, 2020

Drewry Maritime News

Pic: Drewry Shipping Consultants Limited

Port of Dover Prepared for Brexit: Drewry

Alternative capacity could be provided by short-sea container services between the UK and EU to alleviate possible congestion at the Port of Dover post-Brexit.The Port of Dover is the cross-channel port situated in Dover, Kent, south-east England. It is the nearest English port to France, at just 34 kilometres (21 miles) away.According to a new study by global shipping consultancy Drewry the Port of Dover had the capacity to cope with moderate Brexit disruption.The earlier study, validated by the Port of Dover, concluded that of the 2.5 million trailers going via Dover, around 20% (i.e.

Pic: Port of Dover

Port Dover Faces Brexit Heat

Britain's Port of Dover has the resilience to cope with moderate disruption arising from Brexit and there is latent short sea capacity to absorb significant overflow at the port in the event of capacity constraints, according to an independent study by global shipping consultancy Drewry.Among the political arguments about Brexit and its consequences, there has been a surprising lack of objective and quantitative analysis of the implications for the future of the vital short sea trade between the UK and the EU…

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Container Shipping Bankruptcy Lends Insight on Potential Fallout from Trade War

Global trade tensions have captured headlines in recent months, as the imposition of a series of tariffs and counter-tariffs by various global trade counterparts has raised questions about the possibility of a trade war. Such development could potentially have an impact on global trade flows, and, consequently, the companies which facilitate international movement of goods.Though the situation is still developing and the final impact is uncertain, Gregory Draco, the Chief U.S. Economist at Oxford, predicted in July that the tariffs would create an 0.1 percent to 0.2 percent drag on U.S. GDP.

© Stockninja / Adobe Stock

Container Shipping a 'Mixed Bag' - Drewry

South Asia container trade with Europe continues to outpace the Middle East, says Drewry in its Container Insight Weekly report.Container shipments in the combined eastbound Europe to the Middle East and South Asia trade performed well in the first quarter, rising by 5.2 percent year-on-year according to Container Trade Statistics. However, that aggregate rate hides two very different performances by the two destinations. CTS reports that inbound traffic to South Asia soared by 18 percent in 1Q18 to reach approximately 410…

Supply chain experts gather for annual ‘Pulse of the Ports’ in Long Beach. Photo Long Beach Port

Asia-U.S. Trade to Grow 7%

About 500 people gathered at the Long Beach Convention Center for the event, which brings together a panel of shipping and trade experts to offer their perspectives on industry trends and how they affect the San Pedro Bay port complex. One of the panelists, Drewry Maritime Research Senior Quantitative Economist Mario Moreno, predicted Asia-U.S. trade will grow 6.8 percent in 2018, the fastest pace in more than half-a-dozen years. He also estimated the overall U.S. economy will expand 2.8 percent.

DP World Chairman Sultan Ahmed Bin Sulayem Photo DP World

DP World's Earnings Grow 15.1%

Global trade enabler DP World today announces strong financial results for the twelve months ending 31 December 2017. The company delivered earnings in excess of $1 billion and above 50% EBITDA margin for the full year. Revenue grew 13.2% and adjusted EBITDA increased 9.1% with adjusted EBITDA margin of 52.4%, delivering profit attributable to owners of the Company, before separately disclosed items of $1,209 million, up 7.3%, and EPS of 145.6 US cents. On a like-for-like basis…

Graph: Drewry Shipping Consultants Limited

Spot LNG Shiping Fleet's Operating Loss US$230m in 2017

The pressure on LNG shipping spot rates will continue for another year on account of strong fleet growth. However, rates should strengthen from 2019 as fleet growth slows and trade remains strong, according to the latest edition of the LNG Forecaster report published by global shipping consultancy Drewry. Spot rates (East of Suez) for modern LNG vessels averaged $33,000pd in the nine months to September 2017, an increase of 5% compared with the same period last year. While current spot rates are enough to cover operating costs of around $15…

Photo: DP World

DP World Reports 13.5% Container Volume Hike in Q3

DP World Limited handled 52.3 million TEU (twenty-foot equivalent units) across its global portfolio of container terminals in the first nine months of 2017, with gross container volumes growing by 10.0% year-on-year on a reported basis and 9.6% on a like-for-like basis. The third quarter growth rates accelerating to 13.5% year-on-year on a reported basis and 13.3% on a like-for-like basis, ahead of second quarter growth and Drewry Maritime’s upgraded industry estimate3 of 5.5% throughput growth in 2017.

Photo: OOCL

OOCL is 'The Perfect Bride' -Drewry

Orient Overseas International (OOIL) and its container unit OOCL have a good track record for above-average profits in a challenging market and a reputation for being a very well-run company, earning the moniker “The Perfect Bride” by Drewry Maritime Financial Research. Retaining the management team, processes and systems is a wise move and could be of enormous value to Cosco Shipping Holdings (Cosco), Drewry said. OOCL has an owned-fleet of 66 containerships aggregating approximately 440,000 teu.

DP World Jebel Ali. Photo: DP World

DP World Partially Monetizes Canadian Assets

DP World will partner with a Canadian pension fund in a $3.7 billion investment vehicle that primarily looks at brownfield projects in investment-graded countries, says Drewry Maritime Equity Research. The terminal operator will retain operational control of the fund with 55 percent stake, after seeding it with two west coast Canadian terminals (Prince Rupert and Vancouver). The pension fund Caisse de depot et placement du Quebec (CDPQ) will plough $640 million for the remaining 45 percent stake. Hence, the total start-up capital for the investment vehicle is $1.42 billion.

Fig 1 Source Drewry Maritime Research, derived from Container Trade Statistics

No recovery for Container Traffic in sight - Drewry

Asia to West Africa container traffic fell by 19% in the third quarter; the end-year result will not be much better. The IMF’s latest World Economic Outlook, published last month, described “multispeed” growth for sub-Saharan Africa economies with the divide between the haves and have nots hinging on different nations’ exposure to commodities. The biggest West African economies of Nigeria and Angola are struggling to adjust to lower oil revenues with the former expected to see GDP contract by 1.7% this year and the latter to flat-line.

Fig 1 Note Data up to 7 November 2016 only Source Drewry Maritime Research

Record Containership Demolitions has suppressed Fleet Growth - Drewry

A record year for containership demolitions in 2016 has helped suppress total fleet growth close to the rate for demand. To repeat that feat the scrapping record will need to be smashed again, and again. There are multiple ways to measure the vitality of the container industry, from looking at port and trade volumes to carrier income and balance sheet statements. Another is to look at the average age of containership demolitions. Generally, the earlier that owners decide to cut short the life cycle of their steel assets the more downbeat they are of their future revenue earning potential.

Figure 1

Drewry Finds Risk of Carrier Failure Still High

Drewry’s Z-score carrier financial stress index sunk to its lowest ever point following the first-half 2016 results. After Hanjin’s bankruptcy shippers are demanding more financial transparency from carriers. There is still much work to be done to clean up the logistical chaos created by Hanjin’s bankruptcy, but even so there are lessons from the sorry mess that need to be learned to avoid a repeat occurring. Firstly, all stakeholders must understand that no carrier is too big to fail. The hitherto expectation that some white knight would rescue an ailing carrier has been erased forever.

Fig 1

What next for THE Alliance? - Drewry

Hanjin’s bankruptcy leaves the proposed carrier grouping THE Alliance at a size disadvantage to both its future rivals. Might a replacement be called up? The container shipping industry is in a state of flux at the moment and nobody can honestly say they know for certain what the landscape will look like in six months from now. Even before Hanjin Shipping filed for bankruptcy protection the industry was preparing itself for big changes to the make-up of the major shipping alliances, which from April next year are scheduled to downsize from four to three.

Preliminary data; All data includes dry, reefer and tank cargoes Source Datamar

Freight Rates in Europe-ECSA Trade Continue Declines

Container volumes from North Europe and the Mediterranean to the East Coast of South America have now fallen in 26 of the previous 28 months, with the latest statistics from Datamar showing that shipments fell by 8% year-on-year in July. It is the smaller Med to ECSA trade that continues to experience the largest fall-off in volumes with the Datamar figures showing that exports from the Med were down by 12.2% Y/Y after seven months of 2016 to 117,500 teu; versus a decrease of 8.8% for North Europe exports to 306,400 teu.

Tab1e 1   Source Drewry Maritime Research (www.drewry.co.uk)

Terminal Operators face ‘Perfect Storm’

Global container terminal operators are changing gear – and strategies – as the nature of their market environment changes markedly due to slowing growth, bigger ships and larger liner alliances. This year, 24 companies qualify as global/international terminal operators in the Drewry analyses, as listed in Table 1. The nature of the list is already changing due to major M&A activity as explained in more detail here (M&A Deals Change the Landscape in the Container Ports Industry).

Graph: Drewry's Maritime Research

South Asia Shining in Container Growth

Amid generally weak demand around the world the South Asia region is the shining light for container growth, says Drewry's Maritime Research. Growth in container shipping is becoming a rare commodity; global port throughput only increased by 1% in 2015 (the second lowest on record behind 2009) and the first quarter of 2016 was even worse with only a 0.5% rise. That the industry can point to any growth at all is largely down to strong volumes in the South Asia/Indian Subcontinent region…

Table: Drewry Shipping Consultants

Steady as She Goes

Ahead of the Panama Canal expansion two alliances have announced they will upsize some of their ships on the Asia-US East Coast route. How quickly will the others follow? The 9,400-teu Cosco containership Andronikos will make the first transit of the expanded Panama Canal on Sunday 26 June, and ahead of that two shipping alliances – CKHYE and G6 – have laid out their plans to upgrade the size of ships used on the Asia-US East Coast via Panama route. In November last year Container…

Nils S. Andersen. Photo: Maersk Group

Maersk CEO: Negative Rates Hurting Shipping

Negative interest rates are hurting  shipping industry by delaying the consolidation wave so badly needed, Bloomberg reports quoting Nils Smedegaard Andersen, chief executive officer of AP Moeller-Maersk. He said that the monetary policy environment "means consolidation will be much slower because it's easy for banks to keep weak shipping companies above water". It’s the latest example of how negative interest rates are distorting markets and potentially even slowing growth. The…

Rahul leads dry bulk research at Drewry and is the editor of Drewry’s flagship publications Photo Drewry

Recent strength in dry bulk shipping to be short-lived - Drewry

Drewry forecasts dry bulk freight rates in 2016 will be, on average, lower than in 2015, as the medium-to-long term fundamentals for dry bulk shipping will remain challenging, according to the latest edition of the Dry Bulk Forecaster report published by global shipping consultancy Drewry. The dry bulk sector has seen a period of recovery in recent months based on higher iron ore, coal and grain trade. The boom in iron ore trade that has resulted in record exports out of Australia…

Graph: Drewry Maritime Research

Containership Scrapping Gathers Momentum

After a slow start scrapping of containerships gathered momentum towards the end of 2015 and has continued into 2016, says Drewry Maritime Research. A record intake of newbuild containershps (1.7 million teu) in 2015 coincided with an unusually low scrapping total, serving to widen the supply and demand gap that is assisting the erosion of carrier profits. The amount of scrapping halved in 2015 with only about 195,000 teu worth of capacity removed from the world’s cellular fleet…

Photo: Maersk Line

Drewry Questions Viability of ‘Megaships’

Drewry Maritime Advisors  say that the trend of “big ship obsession” may soon come to an end. The three largest carriers in the world – Maersk Line, MSC and CMA CGM – extended their dominance by taking on the most capacity, while the five leading carriers between them accepted two-thirds of all the new capacity. The desire for mega-ships is logical for individual carriers “but the impact on the industry at large has been disastrous with rock-bottom freight rates that we’re seeing now the end result,” says the London-based consultancy.

Image: Hamilton Energy

Low Bunker Prices to Support Tanker Earnings

Lower oil prices performed wonders for the tanker market in 2015, says  Drewry Maritime Research. Tonnage demand surged and oil trade expanded because of high consumption demand and increased stocking activity. Tonnage supply was also kept in check as the contango in oil prices engaged many large tankers as floating storage because onshore storage tanks were full. The most important positive effect of lower oil prices came in the form of reduced bunker costs for vessel owners.

Pic: Hanjin Shipping

Drewry: HMM, Hanjin Mull Merger

A merger between Hyundai Merchant Marine (HMM) and Hanjin Shipping remains a real possibility, says the London-based analyst firmDrewry, who has looked at how such a company will look like. The research firm said in its Container Insight Weekly previous merger talks between HMM and Hanjin were put to rest by the Korean government last year, but the debt situation in both companies was causing serious concern in local circles and could bring the companies back to the table. “A…

Graphics: Drewry Shipping Consultants Limited

Outlook for Listed Dry Bulk Companies in 2016

Investors suffered massive wealth erosion in 2015, as share prices of dry bulk companies kept tumbling during the year, says Drewry Maritime Equity Research (DMER). DMER’s shipping index, which is based on the market cap of leading dry bulk companies, was down ~43% in 2015. Asset values failed to find a bottom with ship owners putting their vessels on the block in a bid to fix their balance sheets. Investors, enticed by cheap valuations, were caught on the wrong foot as stock prices breached critical support levels during the year.

Graphics Source: Drewry Maritime Research

Drewry: Breakbulk Market Weak Until 2017

Global shipping consultancy Drewry Maritime Research said the breakbulk shipping market is expected to remain weak until 2017, citing low freight rates and high competition. Although demand growth is expected to recover next year after a very poor 2015, and supply growth is likely to be minimal, competition from other sectors will maintain pressure on the breakbulk shipping market, according to the latest edition of the Multipurpose Shipping Market Review and Forecaster, published by global shipping consultancy Drewry.