|
WHILE
rates remained under pressure for the bulk
of last year, shipping lines were still
very successful in pushing through their
General Rate Increases (GRIs) last year
on the Asia-Europe and Asia-Mediterranean
trades.
Once
rates did rise they would soon be forced
down again. But more often than not another
rate increase was announced, which pushed
the rates back up again. It seemed like
a constant tug-of-war between shipping lines
and their customer all year long¡K
According
to Alphaliner calculations there were a
total of eight GRIs attempted last year
by Maersk Line, only three of these failed.
The group also noted that all GRIs in the
first five months of the year were successful.
So
despite what proved to be a rather volatile
year for freight rates, in terms of up and
down movement, the year-end result for the
lines was certainly much better than it
was in 2011, a year which saw lines post
serious financial losses.
Asia-Europe
rates on December 28 were up 73.7 per cent
to US$1,218 per TEU from the $701 per TEU
they were at the end of 2011.
Asia-Mediterranean
rates were $1,104 per TEU in the last week
of December 2012, also up 54.6 per cent
from the $714 per TEU one year before, according
to the Shanghai Containerised Freight Index
(SCFI).
Though
freight rates for major trade routes declined
in the first month of 2013, the SCFI-cited
Asia-Europe rates stood at $1,316 per TEU
and Asia-Mediterranean rates were at $1,285
per TEU on February 1 ¡V both still higher
than December's levels.
Nevertheless,
based on the current market situation in
the European Union, it would seem that carriers
will certainly have their work cut out for
them raising rates any further.
Europe's
economy is in tatters and shipping demand
has little scope for improvement, even from
Asia. There is already too much tonnage
in the trade, and a slew of Ultra Large
Containerships (ULCS) are headed for the
market throughout 2013.
Alphaliner's
figures show that 47 ULCS vessels, ranging
from 10,000 to 18,000 TEU, will be delivered
this year to replace smaller and older ships
going out of service. As most of these mega
ships will be deployed on the Asia-Europe
routes, about 20,000 TEU of weekly capacity
will be added to the trade, which is equivalent
to six per cent of the current capacity.
This
means that carriers might not be able to
impose significant rate increases as successfully
as they did last year. And the success of
a new round of GRI slated to come into effect
in March is therefore doubtful.
Ben
Gibson, a container freight derivatives
broker at Clarkson Securities, was quoted
by Lloyd's Loading List as saying: "Circumstances
are different in 2013 and it is possible
that there will be less unity among carriers
as a result of the less-severe market conditions
this time round."
Likewise,
Alphaliner also said the status quo is different
from the situation last year, so the chance
of carriers successfully raising the freight
rates is low.
The
analyst said current utilisation levels
on the Asia-Europe trade are now at their
lowest level since 2009.
And
there is no capacity shortage in sight,
even with carriers announcing that they
intend to suspend at least 15 loops in weeks
seven and eight during the Chinese New Year
period, which will lead to an estimated
capacity reduction of 20 per cent in week
seven and of 47 per cent in Week eight.
Alphaliner
said that the demand on the Asia-Europe
trade has been soft since the beginning
of the year. It said that utilisation during
the pre-Chinese New Year period is around
95 per cent only, which is lower than the
levels in the past three years "when
ships were mostly full in the weeks prior
to the holiday".
Mr
Gibson of Clarkson Securities was cited
by Lloyd's Loading List as saying: "While
capacity cuts are expected over the Chinese
New Year holiday, schedule patterns, as
they stand, show it returning to current
levels in March, which is a threat to GRI
plans."
He
said that the chance of a successful March
GRI would depend on the actual demand growth
after the Chinese New Year holiday, and
also whether carriers could effectively
tackle the overcapacity problem to increase
utilisation.
"K"
Line, Japan's third largest and the world's
15th largest carrier, said recently in a
statement attached with its third-quarter
results of fiscal year 2012 from October
1 to December 31, 2012 that it expected
sluggish Asia-Europe cargo movement in the
first quarter of 2013 due to "persistent
uncertainties in the European economy".
However,
despite what appears to be a negative external
environment, analysts appear cautiously
optimistic about the possibilities going
forward.
Drewry
Maritime Research chief container analyst
Neil Dekker said in the latest Container
Forecaster report: "If carriers continue
to engage in sensible cost cutting and manage
capacity at trade route level, which will
probably involve more radical lay ups, and
projections on global GDP growth ring true,
they could make a profit approaching $5
billion in 2013."
|
