SeaIntel Sunday Spotlight

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Week 25Issue 317
In this issue: Fuel prices dominate rate formation
Despite the fact that fuel prices have become a smaller part of the total cost picture, the fuel price level continues to dominate rate formation. The transfer mechanism for fuel to freight rates will give carriers a net positive contribution of 300M USD in 2017-Q2.
Reported piracy incidents since 2004
There was a sharp increase in piracy incidents from 2008 to 2011 driven by an increase in piracy in the Gulf of Aden and East Africa (including Somalia) during this period. Piracy incidents have been declining in recent years, and 2017 looks to extend this pattern.
Y/Y Capacity growth in E/W trades
Asia-North Europe, Asia-USEC and Asia-USWC are projected to see Y/Y capacity growth in 2017-Q3, while Asia-Mediterranean is projected to see a Y/Y decrease in 2017-Q3.
Service changes CMA CGM launches MED-West Africa service
CMA/HMM/KMTC/SCI/Pendulum Express Lines launch Asia-ISC service
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Week 24Issue 316
In this issue: Weaker start to 2017 than estimated
Revisions of data from Container Trade Statistics reduce global growth estimates for the beginning of 2017 significantly, and backhauls are a stronger driver of growth than head-hauls.
Average vessel size in non-alliance trades
All trade lanes show a significant increase in average vessel size, though balanced by the carriers with the closure of services to keep over-capacity at reasonable levels.
Service changes 2M add Cristobal to TP16/Emerald service
CMA/APL/COSCO launches a ISC-MED service
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Week 23Issue 315
In this issue: Suez wins back south of Africa sailings
Higher oil prices mean that sailing south of Africa is no longer economically viable, and the USEC-Asia sailings have reverted to Suez. Panama is still the preferred USEC-Asia routing option.
Average vessel size per alliance
The Asia-Europe trade shows an upward trend in average vessel size, with 2M leading this increase. While Asia-USEC is impacted by the Panama Canal, the Asia-USWC trade lane did not show any particular vessel size patterns.
Liner connections breed liner connections
Countries which are already well connected tend to receive even more liner shipping connections, whereas poorly connected countries are losing out.
Service changes OOCL and Yang Ming to launch new Intra-SEA service
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Week 22Issue 314
In this issue: Share of operated vessels per alliance
Ocean Alliance and The Alliance show a balanced share of vessel operators, while 2M has a major share of Maersk Line operated vessels. 2M is predominantly presenting services that are operated by both carriers, while OA and TA show the opposite.
18% fewer deep-sea services since 2012
The phase-in of the new generations of large and ultra-large container vessels is having a significant impact on the number of physical services offered in the deep-sea trades.
Knock-On Reliability – Europe and NAM
The knock-on reliability for vessels that arrive on time in North Europe and the US West Coast is not vastly different, whereas the difference is great for Mediterranean and the US East Coast depending on which sub-region the origin port is in.
Service changes CMA CGM to offer Azteca Service
ANL to launch a new service
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Week 21Issue 313
In this issue: Carrier Q1 financial and volume results
Carriers are finally returning to positive territory, with CMA CGM being the most profitable carrier in 2017-Q1. Volumes have also increased Y/Y, with MOL and OOCL posting significant increases.
Are contract rates strengthening?
Carriers are pointing to strengthening contract rates in the market as a sign that 2017 will be significantly better than 2016. But are they strengthening? And by how much?
Online forms: Freight Forwarders disappoint
Of the 126 questions that were asked via online forms, only 39.7% responses were recorded. While the top-10 freight forwarders performed the best with a response rate of 46.7%, the overall performance leaves much to be desired.
Service changes MOL to purchase slots on SC1 service
Carriers to launch two new services
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Week 20Issue 312
In this issue: Online forms: Carriers ignore customers
Of 114 questions asked via online form or general email, only 26.3% were answered by the carriers. 39.5% of carriers answered at least 1 of 3 questions. Top-10 carriers performed the best, with 50% response rate and 60% responding to at least one question.
Very high niche carrier growth
Regional niche carriers are continuing their rapid fleet size expansion, primarily driven by injection of larger vessels. For the largest niche carriers, capacity has expanded an average 14% since January 2017.
Knock-On Reliability Effects: Intra-Asia
97.7% of vessels arriving on time in Nagoya also arrived on time in the next Asian port call on deep-sea services, while for Qingdao the knock-on reliability of on-time vessels was just 86.9%. For vessels arriving late in Vostochny, an incredible 64.1% arrived on time in the next Asian port, while for Tokyo the number was just 15.5%.
Service changes Carriers to terminate CNX/IFX service
Carriers revise port rotation of GEM service
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Week 19Issue 311
In this issue: Knock-On Reliability Effects – Deep Sea
The order in which ports are called in the origin region may have a significant effect on reliability in the destination region.
Increasing capacity volatility
The key deep-sea trades are showing increasing volatility in the amount of capacity deployed from one week to the next. Only the Asia-East Coast South America trade have broken this trend, with higher rates as a result.
No improvement in carrier mobile apps
The number of top-50 carrier offering a mobile app has decreased from 23 to 22 compared to last year, while functionalities seem to have improved ever so slightly.
Service changes MSC to terminate Angola Express service
Maersk Line to Close WAF 3 service
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Week 18Issue 310
In this issue: Schedule Reliability in 2017-Q1
Except for Asia-North Europe, all major East/West trades have declined in schedule reliability over the past year. Hamburg Süd has the highest 2017-Q1 schedule reliability of 78.9%, but none of the carriers have recorded a positive Y/Y change.
Shipping line Price Wars: Current Status
A closer look at the main ex-China trades shows a mixed view of the price wars which devastated the carriers in 2016. Whilst the Asia-Europe price war is completely called off, that is not the case in all trades.
Sources of optimism in IMF April Report
The IMF has published the latest WEO report, indicating finally signs of recovery for the major world economies.
Service changes MOL to join KME service
PIL to offer new Far East-West Africa service
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Week 17Issue 309
In this issue: Strong capacity injection in past 2 months
The top-100 carriers have injected substantial capacity in the past 7 weeks – forcing a rally in TC rates. However, on a year-on-year basis the injection remains moderate.
Asia-ECSA: The rare success story
The management of the supply/demand balance in the Asia-ECSA trade lane is a best practice example of how to raise freight rates to profitable levels, but can the Asia-ECSA success be replicated?
Alliances: North America-NEUR Transit Times
The trade lane from North America to North Europe will see a gain of 21 distinct port-pairs against a loss of 11. The biggest concern however will be the transit times, as 30 port-pairs will experience deteriorating shortest transit times for a total of 114 days added.
Service changes Maersk Line to revise the port rotation of the ME3 service
CMA CGM to update the port rotation of WEMED service
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Week 16Issue 308
In this issue: Are reefer-heavy trades more reliable?
Three out of the four reefer trade lanes analysed show on average a higher level of schedule reliability, when compared to non-reefer trades. On the other hand, when delays occur, they are on average longer in reefer-heavy trade lanes.
Transpacific Alliance concentration
The amount of capacity controlled by alliances on the Transpacific has risen significantly in the period 2012-2017 to the USEC, but not the USWC. Furthermore, there is no link between concentration and rate levels.
Alliances: North America-MED Transit Times
The trade lane from North America to Mediterranean will see few changes in connectivity, as 11 distinct port-pairs will be gained against nine lost. 113 portpairs will see transit times unchanged, while 20 will see it improve and 19 will see it deteriorate.
Service changes OOCL to purchase slots on PS1 service
Carriers to launch a new service
APL to join Asia-Australasia service
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Week 15Issue 307
In this issue: Transatlantic Alliance capacity injections
Both Transatlantic trade lanes will experience a significant injection of capacity compared to 2016-Q2, with Med-USEC and North Europe-USEC showing a 19.4% and 5.6% increase, respectively. Further, there does not appear to be any April capacity shortage.
Digitization: It is not about technology
A trip through the last 20 years of eCommerce history in the container shipping sector clearly shows that if this was a matter of technology, the whole industry would have become digital long ago.
Alliances: NEUR-North America Transit Times
The trade lane will experience a rather positive development in terms of port- pairs, as 29 distinct port-pairs will be gained against nine lost. The transit times will improve slightly, but overall the trade lane remains mostly unchanged.
Service changes CMA CGM to become operator on EURAF5/WEWA service
Yang Ming to start TSE service
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Week 14Issue 306
In this issue: Alliance trade lane capacity injections
Asia-USEC will see a massive alliance capacity injection of 18.0% relative to 2016-Q2, while Asia-USWC will see alliance capacity drop 3.4%. Asia-North Europe and Asia-Mediterranean alliances will grow 3.1% and 4.6% Y/Y, respectively, and 2M is the driving the capacity injection in all trade lanes except Asia-Mediterranean.
All major lines have BEC cyber risks
BEC – or Business Email Compromise – rose 1300% from January ’15 to June ’16 according to the FBI. All major container lines remain exposed, with multiple new fraudulent domains established in 2017.
Alliances: MED-North America Transit Times
While the Asia-Europe and Transpacific trade lanes will see a massive impact in terms of lost and gained port-pairs and transit times, the Med-North America trade lane will remain rather stable.
Service changes Carriers to introduce North Europe Turkey Express Service
CMA CGM to purchase slots on USW service
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