Market Commentary - May 2013

Lars Jensen

CEO & Partner

Welcome to the May monthly commentary. The purpose of this commentary is to provide a brief overview of some of the main trends and developments we have seen in the past month – as well as other odds and ends which we feel compelled to share.

Certainly one of the most important developments in the past month has been the rapid decline in spot rates on particularly the Asia-Europe trade. From 29 March to 3 May rates dropped by as much as 344 USD/TEU, bringing the total drop to 627 USD/TEU in just 7 weeks.

The situation is slightly more benign in the Transpacific trade – at least when the magnitude of the rate decline is considered. However, in reality we see that the partially successful GRI on the Transpacific was entirely eliminated in just 3 weeks.

As we have begun to systematically monitor the weekly capacity on offer 12 weeks into the future, it is clear that both carriers and shippers are facing troubled times. Despite rates having fallen by 41% since New Year, carriers are poised to increase capacity from Asia to East Coast South America by more than 20% - seemingly a recipe for continued rate declines.

Additionally – and in line with our previous expectations – we continue to see carriers place new orders for ultra-large container vessels. The latest order is for 5 x 18.400 TEU at HHI for CSCL. Given that these vessels are purpose-built for the Asia-Europe trade, it is exceedingly likely that one of CSCL’s partners will soon follow suit with a similar order.

It is in this troubled minefield of overcapacity combined with new fuel-efficient vessels that carriers need to make profits in the coming years. Cumulatively the carriers have lost almost 7 billion USD in the past 4 years – and clearly such a trend cannot continue indefinitely. Who will then stand to be the winners of what appears to be a protracted war of attrition? Based on developments in the past decade, the winner(s) will need a solid combination of 3 factors:

1) Access to additional capital

2) Access to a fleet predominantly made up of new fuel efficient vessels

3) An operational as well as organizational setup resulting in the lowest unit costs in the market

Looking at 2012 annual accounts, clearly some carriers appear to be off to a better start than others, however this is not a sprint, it is a marathon – and the winners may not yet have emerged from the pack.

Welcome to our redesigned website


Alan Murphy

COO & Partner

We are very excited to announce the launch of the re-designed SeaIntel.com with several new features and services:

  • User Registration: We have opened SeaIntel.com up for User Registration, making it possible for both Customers and visitors of SeaIntel.com to manage their subscriptions, sign up for new services, manage their account information, and many other functions. User Registration is free, and to sign up, all you need to provide is your name, a valid email address and a password.

  • Sharing of purchased subscriptions and reports: At SeaIntel, we believe in knowledge sharing, and thus we have never supported “per-user” subscriptions. All our publications are sold as “company-wide”, so all SeaIntel products can ALWAYS be shared with your colleagues. We do not only allow company-wide sharing, but actively encourage it, and with the new website we have made company-wide sharing much easier, as you can share your purchases with a single click. 

  • Free Services for Registered Users: We have expanded our Free Services offering, and offer them without any conditions to Registered Users of SeaIntel.com. An overview of the currently available Free Services can be found by clicking on Free Services in the Main Menu.

    Over the coming months we will be expanding our free services offerings and we welcome suggestions for relevant free service offerings. If you wish to remain updated on the free service offerings, we recommend signing up for the free SeaIntel Monthly Newsletter.

  • Online shop for SeaIntel publications:

    Most SeaIntel Maritime Analysis products can now be purchased online in our shop, and over the coming months we will be updating and expanding the online shop offerings, with new analytical reports, new specialised newsletters, SeaIntel market data, and much more. If you wish to remain updated on the SeaIntel products and service offerings, we recommend signing up for the free SeaIntel Monthly Newsletter.

We welcome any and all suggestions for improvements, feature additions, additional content, etc. Any suggestions can be sent to info@seaintel.com or by using the contact form.

Welcome to our new website!

Alan Murphy, COO & Partner


Newsletters and Reports

SeaIntel Maritime Analysis issues a range of newsletters and reports, all focused on two core parameters:

  • The provision of unbiased data relating to developments in the container shipping industry

  • Analysis of developments within the container shipping sector, aimed at providing readers with a solid understanding of the “why” underlying pertinent developments.

We are constantly expanding the range of newsletters and reports, and currently we offer the following:

SeaIntel Sunday Spotlight: The leading analytical newsletter in the container shipping industry. It provides innovative analytical angles to market trends, as well as uncovers new information of relevance in the container shipping industry. Used by the majority of container lines as well as a range of forwarders, BCOs, ports and banks it provides a factual basis for the discussion of industry developments.

Monthly Report: A brief highlight of the main developments seen in the industry over the past month. This report is available free of charge to registered users on www.seaintel.com .

Global Liner Performance Report: The industry’s only comprehensive measurement of container lines’ schedule reliability, covering more than 10.000 monthly port calls, across 32 trades and 60 container carriers. Also includes measurements on the timeliness of actual container delivery based on more than 1 million daily container status messages from INTTRA. Indispensable detailed information when managing supply chains with a focus on reliability.

eCommerce Offerings Report: The only comprehensive report in the industry concerning eCommerce functionalities offered by the 51 largest global container carriers. These carriers control 92% of the global container trade.

Environmental Benchmark Report: The industry’s first benchmark report ranking the 20 largest container carriers according to their environmental performance. The carriers are ranked on a 1-5 scale based on 11 different parameters including vessel performance, carbon footprint calculators and voluntary usage of low-sulphur fuel above legal requirements.

Process Optimization

SeaIntel Maritime Analysis provides clients with detailed process mapping projects, ranging from single-day engagements to enterprise-wise process mapping projects encompassing more than 100 processes using multi-disciplinary teams with key industry experience.

Our focus is one of providing people with hands-on experience who have subsequently been trained as process consultants, often as lean green belt or lean black belt. Our teams are thus intimately familiar with the business realities facing the client during day-to-day operations, and are able to facilitate and design processes from a practical rather than theoretical approach.

Please contact us if you wish to discuss specific engagements.

Review of Market Intel Setup

SeaIntel Maritime Analysis has extensive expertise and experience in the organization and development of market intelligence departments in major shipping companies, and are able to provide consulting assistance to companies seeking to optimize their own intelligence efforts.

Our core competency areas are:

  • Organizational review and design for market intelligence
  • Assessment of skillsets required in relation to the purpose of the market intelligence organization
  • Development of training sessions to improve skill sets to match the required levels
  • Identification of relevant data sources
  • Development of simple in-house tools to facilitate usage of market intelligence
  • Process mapping of market intelligence
  • Establishment of internal service level agreements between the market intelligence department and internal users of intelligence and analysis

Mystery Shopper

In the current tough market conditions, the key to success is whether your organization can bring in new customers, and not simply maintain existing business. Often the key to a sale is to be quick in providing a quote – not necessarily to be able to provide the lowest quote.

Do you know which experience new prospective customers get when they contact you?

Are you sure, that the experience is what you intend it to be? If not, then we would like to give you the real picture from a new customer point of view.

SeaIntel Maritime Analysis has previously made several tests within the shipping industry, where we approached carriers and forwarders as a new customer who would like a quote for a simple port-port shipment between major ports. The number of answers we got was illuminating with 25-33% of large carriers and forwarders providing quotes – but 90% of smaller forwarders responding.

The “Mystery Shopper” program is performed anonymously.

Test of 5 locations including evaluation report is EUR 699 and 20 locations including evaluation report is EUR 2499

Contact us for a specific tailor made solution.

About SeaIntel

SeaIntel Maritime Analysis is a leading market intelligence provider in the container shipping industry. Our focus is on developing original information and analysis for all container market stakeholders, as well as for individual clients.

Information only adds value if it is being actively used. This is why our standard reports and our tailor-made consultancy services are always directly useable by the receiver.

Our core belief is that anything can be analyzed - and analyzed well. Information always exists. However the solution to a particularly difficult problem often rests in the ability to think out of the box and develop new analytical viewpoints. Doing this is our key strength.

We provide these services in a range of situations :

  • We provide market intelligence information, either in standardized online formats or tailored to our customers' specific needs

  • Standard analysis reports to provide solid background knowledge on current market issues

  • Tailor-made tactical analysis which is directly useable by front-line sales staff

  • Tailor-made strategic analysis and forecasting directly useable by senior management as well as boards of directors

  • Custom-build market intelligence database structures to match our clients' individual needs

  • Advise on the development of efficient market intelligence departments, as well as provide consultancy services in establishing and training such departments

  • Process mapping, analysis and optimization

  • We can provide partly or fully outsourced solutions for your market intelligence needs

Services and Consultancy

SeaIntel Maritime Analysis offers a wide range of services and consultancy expertise.

We offer a number of standardized service offerings, including training courses in basic liner trade, “mystery shopper” analysis intended to measure the experience of customers calling a carrier as well as the provision of market intelligence as an outsourced service.

We also provide bespoke consultancy ranging from small remote analysis assignments lasting only a few hours, to major assignments involving multi-disciplinary expert teams being onsite with clients for extended periods of time.

Please contact us if you wish to enquire about our capabilities for specific needs.