Carrier ‘gravy train’ steams ahead, thanks to congestion and new contracts

Despite a weakening in demand, ocean carriers will bank another $200bn of profit between them this year.
In its latest Container Forecaster report, maritime consultant Drewry said it was downgrading its 2022 outlook for world port throughput to 4.6%, from its previous assessment of 5.2%.
This is due to “fast-rising inflation” and ongoing supply chain bottlenecks which, it said, were “conspiring to slow the pace of growth”.
Nonetheless, Drewry says it expects the …

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‘Stick or twist’ – do shippers play the spot market or go for fixed-rate contracts?

Volume shippers offered new long-term fixed-rate contracts by container lines are, nevertheless, still keen to keep a foot in the door of the spot market.
The extreme volatility of the spot market saw many shippers get their fingers badly burned over the past 18 months as rates were turbocharged by supply constraints and strong consumer demand.
But if port congestion eases and demand softens, short-term market rates could head south again quite …

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Liner operators can boost income while smaller carriers reap bigger profits

Analysis by shipping consultancy Drewry suggests carrier profits, far from diminishing this year, will rise again as the Omicron variant disrupts supply chains and new contracts are brought into the equation.
Based on what is expected to have been yet another new record for ocean carrier profitability in the final quarter of the year, Drewry has again upgraded its cumulative liner profitability guidance for last year, from $150bn to $190bn.
The consultant …

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Market distortions make mockery of free-market container shipping

Increased commercial power, diminished choice and competition, along with carrier exemption from competition regulations are distorting the container shipping market, according to the British International Freight Association (BIFA).
Its director general, Robert Keen, is the latest in a list of shippers and their representatives to raise competition concerns with regulatory authorities following investigations by the US Federal Maritime Commission (FMC) and a letter from European freight...

Four major threats almost guaranteeing another challenging year for shippers

The fractious relationship between ocean carriers and their freight forwarder and NVOCC customers is seen as one of four key disrupters to the supply chain next year, by maritime consultant Drewry.
“We are starting to see that some ocean carriers are withdrawing from NVOCC relationships and others making it difficult for NVOs to offer carrier-like fixed-contract rates to shippers under preferential ‘named account’ terms agreed in advance with ocean carriers,” it said.
Several …

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Drewry & Freightender Join For Ocean Freight Procurement E-Solution

  • Drewry and Freightender announce they have entered a value-add partnership.
  • It combines Drewry’s industry leading ocean freight cost benchmarking and procurement support services with Freightender’s cloud-based, next generation procurement technology platform.

Global shipping consultancy, Drewry and Freightender are pleased to announce they have entered a value-add partnership, combining Drewry’s industry leading ocean freight cost benchmarking and procurement support services with...

Global Container Availability Crisis To Stay ‘Put’ Amid Tight Box Capacity

The global container availability crisis is unlikely to ease before the end of the year – despite 2021 likely being a record-breaker in terms of new boxes delivered, reports the Loadstar.

A possible spike in box production

According to John Fossey, senior analyst of container equipment at Drewry Shipping Consultants, around 1.4m teu of new containers were delivered in the first quarter, around 10% more than in the final quarter of last year and 21% more than in Q1 20.

Based on current activity,...

No Post-CNY Easing of Supply Chain Pressure

Hopes that the Chinese New Year would give container lines breathing space to reposition the vast numbers of empty container appear to be short-lived, reports The Loadstar.

  • Shippers and forwarders trying to find equipment for shipments out of China had hoped the two-week holiday would allow time to build up a stock of boxes to ease supply chain pressure.
  • But any gains achieved were unlikely to last long, Akhil Nair, vice president of global carrier management & ocean strategy at SEKO Logistics,...

Trade lane competition set to feature in 2021

Shippers should prepare themselves for greater competition between trade lanes in 2021, as global carriers capitalise on having the upper hand in upcoming contract negotiations.

The spike in freight rates on the Asia-Europe trade this month (up 45% in a week according to the World Container Index published by Drewry) has brought the comparative cost per mile of the different trade lanes into the spotlight in recent weeks.

With spot rates between Asia and Europe previously trading at less than...

KOBC ups box leasing to HMM as shortages drag into 2021

State-backed ship financing institution Korea Ocean Business Corporation (KOBC) has agreed to a third round of container leases with the country’s flagship liner operator, HMM.

KOBC announced on 17 December that it will lease 86,000TEU in 40ft containers, in order to overcome the well-documented container shortage that has plagued the industry since the peak season began in July.

Since October 2019, KOBC has signed three container leasing agreements with HMM, for a total of 280,000TEU. The...

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