Asia-Europe

The phased implementation of Europe’s emissions trading system on the shipping industry beginning next year will generate significant costs for carriers that will be passed on to customers in the form of new charges.

Ocean carriers on the busy trade lane plan to slash deployed capacity to match falling demand levels that typically follow China’s Golden Week holiday at the start of October.

Facing an operating loss of up to $500 million for 2023, Zim hopes the sharing arrangement with its larger competitor will help drive efficiencies “amidst continued near-term headwinds.”

But in its interim earnings announcement, Cosco Shipping Holdings also maintained a cautious outlook due to challenges it cited, including the global economy, inflationary pressures in Europe and America, and the delivery of new vessels.

Weak European demand for containerized trade through the first half is hurting port throughput at the region’s top three gateways, but signs are emerging of recovering volume on certain routes.

Additional upward pressure might soon be brought to bear on spot rates, with forwarders expecting carriers to ramp up blank sailings through the fourth quarter to mitigate a significant injection of new capacity.

The Cosco Shipping subsidiary noted that significant uncertainties over economic growth prospects and the huge injection of capacity into major trade lanes made forecasting difficult.

Getting shippers to commit to premium-priced, low-emissions shipping services is a hard sell for ocean carriers and forwarders as cargo owners enjoy rates that are now mostly below pre-pandemic levels after two years of record highs.

Carriers will have to withdraw large amounts of capacity to prevent a freefall in rate levels that are expected to be undermined by rising capacity and subdued demand, according to forwarders.

The first-half results of Hapag-Lloyd and HMM mirror those reported by their peers, with earnings severely challenged by the rapidly normalizing market.

Despite unfavorable comparisons with last year, volume between Asia and the Mediterranean has surpassed that recorded in pre-pandemic 2019.

The latest China–India service follows the announcement of another new string from CULines and capacity increases from other carriers, including Pacific International Lines, Evergreen Marine and Regional Container Lines.

While the magnitude of peak season in any given year may have macroeconomic significance in shedding light on the strength of consumer spending and the economy overall, it is only one factor driving the market conditions that affect the physical movement of goods, writes Peter Tirschwell.

Inclusion in the European Union’s emissions trading system will affect not only the cost of shipping to and from the EU, but will likely put upward pressure on pricing for cargo that doesn’t touch the EU at all, writes analyst Lars Jensen.

The financial results of the Singapore-based carrier reflect a return to a more normal container shipping market, albeit one characterized by weak demand from inflation-hit destination markets.

The new price levels signal the intent of carriers to drive up freight-all-kinds rates in a move to capitalize on any increased buying should a peak season emerge.

With European parliamentary elections set for early June 2024, road and rail lobby groups have emphasized the urgency of getting the latest freight transport measures adopted.

Ocean carriers are showing a lack of urgency to blank sailings even as China’s exports weaken and new vessels continue to come online.

The fall hid some upbeat trends, with the number of refrigerated containers rising more than 10% in the first half and the rate of decline in overall volumes easing in the second quarter.

The Singapore-based carrier’s multi-billion-dollar investment plan into terminals, new ships and decarbonization is meant to secure the right assets in the right areas to keep it in the black.

The extent to which the rapidly cooling container shipping market is hurting China’s main carriers is likely to be repeated across the industry as reporting season approaches.

The carrier is attempting to stem the spot rate slide in a weak demand-high-capacity environment that has seen freight prices fall more than 80% from the record highs of early last year.

Sustained weakness in demand, excess capacity and ongoing economic uncertainty are undermining the container trade in and out of Europe, making a third-quarter rebound increasingly unlikely.

Solid demand from both regions has encouraged the carrier to deploy its own vessels on the Asia-Med trade lane.

The shift to green fuels needs to be “supercharged” by establishing a clear zero-emissions target at the IMO’s July meeting, according to an Oslo-based shipowner group.

There are growing expectations in the container shipping market that the Asia-Europe trade will see a peak season this year as European import volume growth continued in April.

About 65% of the current carrier orderbook is for ships over 15,000 TEUs in capacity, the majority of which will be deployed on the already oversupplied Asia-Europe trade.

Air cargo carriers are set for a bleak few months, with high inventory levels and economic issues in destination markets further dampening the traditionally slow summer season.

Slow-steaming has come to the fore of late as ocean carriers seek help in absorbing overcapacity, but analyst Lars Jensen says the common refrain that slower speeds also help to improve schedule reliability doesn’t hold water.

Ocean carriers are pulling all available capacity management levers to address a supply-demand imbalance that is set to widen significantly through 2024.

Although the container shipping order book is the highest it has been in many years and demand remains subdued, the ground is shifting under the ocean market in new and unfamiliar ways, writes Peter Tirschwell.

Price is once again on the side of shippers, with excess ocean capacity allowing them to extract lower rates from service providers.

While indicators may point to a “normal” container shipping market in the wake of the pandemic, it is important to remember that disruptions large and small are all part of that normality, writes analyst Lars Jensen.

The Singapore-headquartered terminal operator has extended its reach deeper into the landside business, targeting the growing Central Asia rail freight market.

Challenging economic conditions, compounded by sanctions against one of its largest trading partners, led to a sharp drop in first-quarter volumes at Europe’s third-busiest container port.

The South Korea-based liner became the latest carrier to illustrate the post-pandemic crash in container shipping, posting a 91% drop in net profit for the first quarter.

The Taiwan-based carrier is the latest container shipping line to have its extreme profitability of recent years slashed by a slowdown in demand and excess capacity.

A surge in volume from Asia to the Mediterranean in March has carriers injecting capacity into the trade to capture growing demand from southern Europe.

Highlighting the fall in demand, total liftings at Cosco Shipping Lines and OOCL fell more than 10 percent in the first quarter, to 5.5 million TEU.

There are concerns that the latest requirement could force the price of sustainable aviation fuel higher, which would be felt in the pockets of airline passengers and cargo shippers.