Container Shipping: The many pitfalls in the coming months will decide the fate of the year
12 June 2019As weak demand growth is forecasted for the coming quarters, the container shipping industry is set to return to negative margins.
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As weak demand growth is forecasted for the coming quarters, the container shipping industry is set to return to negative margins.
What we all seem to want is stable and sustainable economic growth within which to build our business, but what we are getting at the moment is recurrent minor shocks that shake our confidence and prohibit us from moving forward fast.
Container volumes in head-haul and regional trades are the key drivers of container vessel demand, average container rates, liner operator profits, and, since 2020, port congestion. According to Container Trade Statistics, combined head-haul and regional trade volumes fell 0.4% y/y in the first half of 2022. Head-haul volumes were 1.3% lower than a year ago while regional volumes were 0.6% higher. Under normal market circumstances the peak season in key head-haul trades should lift Q3 volumes. However, recently released volume statistics indicate that there may be no peak season in 2022 but it is very likely that volumes will slow in Q4.
Cocaine, illegal timber, arms, cash, chemical weapons…and sea horses. Rarely are the crew, shipowner, operator or importer aware that their ships and containers are abused and used for illegal transport, and rarely is the crew on board involved.
In 2019, prior to the onset of the COVID-19 pandemic, jet fuel contributed an estimated 8% of oil products’ cargo demand. When travel restrictions were imposed during the pandemic, air travel suffered significantly and jet fuel shipments in 2021 were down approximately 33% compared to 2019. Airlines’ capacity has been on a slow recovery path since bottoming out in April 2020 but remains significantly lower than 2019 levels.
Severe overcapacity in the market and recently agreed contract rates on the transpacific trade lanes keeps pressure high on the liner companies.
Course organiser Ayako is Manager in BIMCO’s Training Department, and is responsible for marketing and implementation of BIMCO’s training courses worldwide. Prior to joining BIMCO in 2015, Ayako has worked for various international organisations, including UNICEF, FAO, WFP and UNOPS, and has been responsible for large-scale emergency logistics and coordinated training programs on humanitarian logistics and supply chain management in Asia, Africa, Europe and in the Middle East. Ayako holds a MSc in International Relations from the London School of Economics and Political Science and BA from Boston University.
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