SeaIntel Sunday Spotlight

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2017

February

Week 8Issue 300
In this issue: Pacific contract rates 26% too low
The close link between spot and contract rates on the Pacific eastbound trade was broken in 2016/17, with contract rate levels far below levels indicated by the spot markets – expect strong increase from May’17.
Alliances: Transpacific Networks UPDATE
With major service changes to most of the networks announced by the alliance carriers, we update our alliance network analysis, and find that the Asia-USWC trade is now more balanced, and less dominated by Ocean Alliance.
Alliances: Asia-Europe Networks UPDATE
We also update our Asia-Europe network analysis, and find that most of our conclusions from four weeks ago still hold, despite major changes. 2M will offer the most unique port-pairs while Ocean Alliance will focus on frequency.
2017-Q1: 600M USD loss from BAF delay
While freight rates started to pick up in the 4th quarter, the exposure to the BAF-delay grew to the highest level in recent years. 2016-Q4 saw carriers hit with a staggering 1.2bn USD cash outlay.
Service changes 2M to revise their service network
CMA CGM to stop Baltic Levant Express service
More information
Week 7Issue 299
In this issue: Shorter distances undermine demand
The past year saw the average transportation distance per TEU decline by 1.5%. Since 2011, average sailing distances have shortened by 247 nautical miles.
Weak Panama Canal effect on USEC ports
Very weak to non-existent Panama Canal expansion impact on US East Coast port volumes. US East Coast ports have seen weaker-than-US-average growth in full imports in 2016-2H, while exports have only grown marginally faster than the US average.
Trade lane capacity versus spot rates
Asia-USWC, Asia-USEC and Asia-ECSA show a statistically significant negative correlation between capacity and spot rates. Correlations are also found to be negative for Asia-North Europe and Asia-Mediterranean, but they are not statistically significant.
Service changes Eimskip to revise their service network
More information
Week 6Issue 298
In this issue: Carriers benefitting from Panama Canal
Following an initial decline, the spread in Pacific freight rates between USWC and USEC has been steadily increasing, with carriers now fully benefitting from the savings from the expanded Panama Canal
Carrier On-time Performance in 2016
Global schedule reliability rose Y/Y by 4.5 percentage points to 82.8% with all carriers improving their on-time performances. Wan Hai was the most reliable carrier in 2016.
January 2017 IMF world outlook update
IMF projections for advanced economies have been upgraded, but US protectionist policies bring uncertainty to the economic forecast.
Service changes CMA CGM to leave WAX 2 service
More information

January

Week 5Issue 297
In this issue: The New Alliances: Transpacific Networks
While the upcoming Asia-USEC networks for the three alliances seem quite competitively balanced, the “Ocean Alliance” appears to have a strong competitive edge on Asia-USWC.
CNY seasonality indicate higher rates
An analysis of the historical seasonality patterns for spot rates following Chinese New Year indicate 90-170% year-on-year spot rates increases to Europe and North America in 2nd quarter 2017
Language support on carrier websites
While carriers support 9% more languages on their global websites compared to 2015, some central information could only be accessed in English for some carriers.
Service changes ZIM to launch new Transpacific services
Carriers to offer 2 transpacific services
More information
Week 4Issue 296
In this issue: The New Alliances: Asia-Europe Networks
There is no “best” alliance network: 2M will be offering the widest selection of unique direct port-pair combinations, while “Ocean Alliance” will be offering a very high frequency hub-hub network. “The Alliance” seems to be focused on shortest transit times.
Pending inventory correction on TPAC
Inventories have been steadily building in the US, and from a logistics perspective they are poised for a reduction – this will have a severe negative impact on Transpacific container volumes.
Availability of instant online rates
The majority of online freight forwarders claim to offer online rates, while in reality they require customers to send a quote request that they act upon. A few online freight forwarders seem to offer competitive freight rates, but it is uncertain if all charges are included.
Service changes Maersk Line to launch Trans-Tasman service
Carriers to change the port rotation of Levant Sea service
CMA CGM to revise the port rotation of NEFWI service
More information
Week 3Issue 295
In this issue: 12% of Panamax ships scrapped in 2016
For the middle-aged vessels aged 15 years or older, as much as 35% of the Panamax container vessel fleet has been scrapped. Scrapping all Panamax vessels above 15 years will only have marginal impact on Supply/Demand.
Chinese New Year blank sailings timing
Carriers announce blank sailings for Asia–North Europe and Asia-USEC well in advance, while shippers and freight forwarders will find it difficult to predict capacity withdrawals on Asia-USWC and Asia-Mediterranean over the 2017 CNY period.
Asia-Europe: volumes, utilisation and rates
Vessel utilisation has been falling from the peak in 2014-Q3, but an uptick is expected for 2016-Q4. Freight rate growth is shown to be driven by utilisation changes, and current utilisation levels suggest a flattening of freight rates in the coming months.
Service changes CMA/PIL to revise port rotation of MIDAS service
More information
Week 2Issue 294
In this issue: Spot rates increasing faster than fuel
Whilst global average freight rates including contracts continue to lag behind oil price changes, key ex-China spot rates have increased much faster than warranted by fuel price alone.
Fewer disruptions and delays in Africa
Schedule reliability in Europe-Africa reached the highest level of 70.0% in November 2016, followed by a significant decline in congestion in African ports in 2016. Unfortunately, much of the improvement seems to be driven by lower import volumes.
Chinese New Year capacity reductions
If the ratio of 2017 CNY blank sailings should match the last two years, carriers need to blank significant amounts of capacity on Asia-USWC and AsiaMediterranean, with only limited further blankings in Asia-North Europe and Asia-USEC.
Service changes Seatrade to launch a new EuropeAustralasia service
Wan Hai to join Thailand-Belawan service
More information

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