2020 marks a milestone for the shipping industry with the IMO 2020 Sulphur Cap set for implementation on 1 January 2020. Join BIMCO’s Chief Shipping Analyst, Peter Sand, as he offers his take on what the year will bring for the container shipping segment and the shipping industry in general.
JOC Container Shipping Webinar
Peter Sand will feature in Global shipping outlook: What will 2020 hold? A webinar streamed by The Journal of Commerce (JOC) and moderated by JOC.com executive editor, Mark Szakonyi. Sand will present participants with BIMCO’s outlook on the container shipping market and the flurry of challenges it faces such as the continued trade war and the upcoming IMO 2020 Sulphur Cap.
The webinar will be livestreamed on 5 December 2019 at 11:00AM ET / 5:00PM CEST and is free to attend.
Sign up for the webinar here.
Lloyd’s list Outlook 2020
Forum Sand will also be physically present at Lloyd’s list: Outlook 2020 Forum on 10 December 2019 in London, UK. At the event, he will be contributing to a panel discussion alongside other prominent industry speakers, including Mark Cameron, Executive Vice President and COO at Ardmore shipping, Grahaeme Henderson, Vice president of Shipping & Maritime at Shell, Michael Parker, Chairman of Global Shipping, Logistics & Offshore at Citi Group, as well as other industry voices.
The panel discussion will focus on the 2020 outlook for the global shipping industry and provide insights on key macroeconomic factors in the market and the future efficiency of shipping. Richard Meade of Lloyd’s List will chair the panel discussion. The venue is set to take place at 8.30 am – 10.30 am GMT at Hilton Park Lane, London.
Sign up for the event here.
Container shipping: Pressure remains despite some of the trade war damage being offset by a reshuffling of manufacturing in Asia
The world has been going through a synchronized slowdown in 2019 with lower GDP growth, alongside rising trade barriers. The container shipping market has certainly felt the consequences of this slowdown with slowing growth of container trade volumes and lower freight rates.
The container carriers are well acquainted with bunker price volatility. In recent decades, the carriers have experimented with bunker adjustment factors (BAFs) in order to mitigate some of the bunker price volatility. However, the implementation of BAFs has often been received with mixed results, partly due to non-transparency of the BAFs.
Container volume growth has slowed significantly in 2019 compared with previous years.
BIMCO believes that the slowing container volume growth through 2019 could result in more cutthroat competition amongst the carriers for container volumes. If carriers end up in a competition of undercutting each other, the probability of implementing BAFs will certainly be decreased significantly.
With less than a month until the implementation of the IMO 2020 Sulphur Cap, the bunker market is encapsulated in uncertainty. HSFO prices have exhibited high volatility in the second half of 2019 with the MGO LS – HSFO spread widening to new highs in some ports. A plethora of uncertain variables lie ahead. Fuel oil availability, compatibility and price levels are all variables that will be closely followed in the months to come. Seemingly, the oil price fluctuations are no longer driven by fundamentals, but instead dictated by market uncertainty and speculation. A widening spread could have dire consequences for some owners, whereas others would be in a much more advantageous position.
No matter the outcome, IMO sulphur regulation will entail higher costs for the industry. Owners hoping to pass on the costs associated with the regulation might have a difficult time doing so, if the underlying market fundamentals are not balanced. BIMCO stresses that the market fundamentals must be in the best possible balance if owners should uphold any hopes of passing on these additional costs.