FONASBA ANNUAL MEETING FONASBA ANNUAL MEETING The containership market The containership market Centro de Navegación (Argentina) Centro de Navegación (Argentina) Eng. Rodolfo García Piñeiro Eng. Rodolfo García Piñeiro Opatija, Opatija, October 2008 October 2008
FONASBA ANNUAL MEETING The containership market. Centro de Navegación (Argentina) Eng. Rodolfo García Piñeiro Opatija, October 2008. Executive summary. Foreword. Bunker, consumption, prices, etc. Construction. The fleet The charter market The ports. Foreword. - PowerPoint PPT Presentation
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FONASBA ANNUAL FONASBA ANNUAL MEETINGMEETING
The containership marketThe containership market
Centro de Navegación (Argentina)Centro de Navegación (Argentina)Eng. Rodolfo García PiñeiroEng. Rodolfo García Piñeiro
Opatija, Opatija, October 2008October 2008
Executive summaryExecutive summary
• Foreword.Foreword.
• Bunker, consumption, prices, etc.Bunker, consumption, prices, etc.
• Construction.Construction.
• The fleetThe fleet
• The charter marketThe charter market
• The portsThe ports
ForewordForeword
• Carriers launched huge construction programs in 2007, focusing on Carriers launched huge construction programs in 2007, focusing on ships of 12,500 teu, mostly aimed at the Far East – Europe trade.ships of 12,500 teu, mostly aimed at the Far East – Europe trade.
• In a high fuel cost era, the impact of the fuel bill can be spread In a high fuel cost era, the impact of the fuel bill can be spread over a larger number of containers.over a larger number of containers.
• Many carriers are set to compete with ships that are based on the Many carriers are set to compete with ships that are based on the same or similar molds as their competitors.same or similar molds as their competitors.
• Competition will move to other areas, in particular to marketing Competition will move to other areas, in particular to marketing innovations and the management of complex logistics operations.innovations and the management of complex logistics operations.
• On the Europe related trades, conferences will disappear this On the Europe related trades, conferences will disappear this month (october 2008), carriers will all become outsiders to each month (october 2008), carriers will all become outsiders to each other. other.
• New initiatives to attract new or lost customers have been unveiled New initiatives to attract new or lost customers have been unveiled this year: online rating and booking system, online calculator to this year: online rating and booking system, online calculator to handle the BAF, conversion of box rates from dollars to euros handle the BAF, conversion of box rates from dollars to euros (Maersk). (Maersk).
Foreword (cont.)Foreword (cont.)• Carriers controlling terminals, to avoid the disruptions in schedules caused by Carriers controlling terminals, to avoid the disruptions in schedules caused by
the “first come, first served” principle, or fixed berthing windows, with other the “first come, first served” principle, or fixed berthing windows, with other carriers seeking the same windows, we will see in the years to come.carriers seeking the same windows, we will see in the years to come.
• The increase in bulk carriers rate provided an incentive to shift The increase in bulk carriers rate provided an incentive to shift containerizable cargoes (agro, forest and steel products) from bulk to containerizable cargoes (agro, forest and steel products) from bulk to containers. Quantities has been modest. containers. Quantities has been modest.
• The main challenge nowadays and beyond, is to reduce bunker expenses The main challenge nowadays and beyond, is to reduce bunker expenses while at the same time a responding to increased environmental pressure to while at the same time a responding to increased environmental pressure to contain and reduce emissions.contain and reduce emissions.
• Nuclear power on ships raises ecological and safety concerns, e-m propulsion Nuclear power on ships raises ecological and safety concerns, e-m propulsion tunnels are a remote possibility. Wind power and solar cells are not a realistic tunnels are a remote possibility. Wind power and solar cells are not a realistic option.option.
• Kite sails are being experimented, saving a small ammount of fuel on Kite sails are being experimented, saving a small ammount of fuel on favourable wind conditions.favourable wind conditions.
• The most efficient solution to achieve this is to reduce speed. Speed is costly. The most efficient solution to achieve this is to reduce speed. Speed is costly. A 10 % increase in speed demands a 30 % increase in FO consumption.A 10 % increase in speed demands a 30 % increase in FO consumption.
• How deep the US crisis could go and to what extent could it impact in the How deep the US crisis could go and to what extent could it impact in the shipping business, is the question with a not easy answer.shipping business, is the question with a not easy answer.
The market shareThe market share• In 2007 the teu capacity on liner trades reached 11,7 million teu.In 2007 the teu capacity on liner trades reached 11,7 million teu.
• The global market share of the three world leading lines, Maersk Line, MSC and The global market share of the three world leading lines, Maersk Line, MSC and CMA CGM, has grown from 32,1 % to 34,1 % in terms of teu capacity during the CMA CGM, has grown from 32,1 % to 34,1 % in terms of teu capacity during the year 2007.year 2007.
• The growth in 2007 has been far from being equally shared by the three leading The growth in 2007 has been far from being equally shared by the three leading lines, as Maersk continued to lose share (from 16,8 % to 16,1 %), reflecting the lines, as Maersk continued to lose share (from 16,8 % to 16,1 %), reflecting the dificulties the company experienced in integrating P&O Nedlloyd. dificulties the company experienced in integrating P&O Nedlloyd.
• MSC and CMA CGM continued to strengthened their positions. MSC has increased MSC and CMA CGM continued to strengthened their positions. MSC has increased its share from 9,6 % to 10,4 % while CMA CGM increased from 6,5 % to 7,6 %.its share from 9,6 % to 10,4 % while CMA CGM increased from 6,5 % to 7,6 %.
• Both lines, family businesses, do not have shareholder pressures. With huge Both lines, family businesses, do not have shareholder pressures. With huge order books (around 600.000 teu each) it is expected an increase in their order books (around 600.000 teu each) it is expected an increase in their respective sharesrespective shares
• The carriers that most raised their market shares in the past eigth years are in The carriers that most raised their market shares in the past eigth years are in order CMA CGM, MSC, CSCL, and Hapag Lloyd (218 %, 140 %, 120 % and 110 order CMA CGM, MSC, CSCL, and Hapag Lloyd (218 %, 140 %, 120 % and 110 %).%).
• Bid on Hapag Lloyd outcome remains open. NOL and Hamburg Alliance are the Bid on Hapag Lloyd outcome remains open. NOL and Hamburg Alliance are the
two potential buyers left in the race.two potential buyers left in the race.
Source: Axs-Source: Axs-AlphalinerAlphaliner
Concentration in Container Liner Shipping:Concentration in Container Liner Shipping:Top 10 CarriersTop 10 Carriers
Top 20 leagueTop 20 league(October 2008)(October 2008)
Fuente: AXS-Alphaliner
•The percentage shown on the left of each bar represents the operator's share of the The percentage shown on the left of each bar represents the operator's share of the world liner fleet in TEU termsworld liner fleet in TEU terms
Rnk Operator TEU Share1 APM-Maersk 2.026.047 15.9%2 Mediterranean Shg Co 1.399.345 11.0%3 CMA CGM Group 958.071 7.5%4 Evergreen Line 635.542 5.0%5 Hapag-Lloyd 513.130 4.0%6 COSCO Container L. 492.770 3.9%7 APL 472.723 3.7%8 CSCL 426.621 3.3%9 NYK 418.794 3.3%10 MOL 378.895 3.0%11 Hanjin / Senator 372.990 2.9%12 OOCL 361.768 2.8%13 K Line 304.349 2.4%14 Zim 303.773 2.4%15 Hamburg Süd Group 296.258 2.3%16 Yang Ming Line 295.333 2.3%17 CSAV Group 282.388 2.2%18 Hyundai M.M. 254.403 2.0%19 PIL (Pacific Int. Line) 185.786 1.5%20 UASC 143.670 1.1%
0,0% 5,0% 10,0% 15,0% 20,0%
UASC
PIL (Pacific Int. Line)
Hyundai M.M.
CSAV Group
Yang Ming Line
Hamburg Süd Group
Zim
K Line
OOCL
Hanjin / Senator
MOL
NYK
CSCL
APL
COSCO Container L.
Hapag-Lloyd
Evergreen Line
CMA CGM Group
Mediterranean Shg Co
APM-Maersk
The charter marketThe charter market
• We can see in the following graph, the charter market development since january 2000 up to We can see in the following graph, the charter market development since january 2000 up to
now.now.
• Owners opt for lower rates than risk having their vessels unemployed. Carriers are taking vessels Owners opt for lower rates than risk having their vessels unemployed. Carriers are taking vessels
on much shorter charters.on much shorter charters.
• It is however not posible to make any concrete statement about the charter market trend, as the It is however not posible to make any concrete statement about the charter market trend, as the
effects of the financial market crisis on various sectors of the economy are still not foreseeable.effects of the financial market crisis on various sectors of the economy are still not foreseeable.
• Many ports have now reached the limit of their handling capacity, an waiting times may become Many ports have now reached the limit of their handling capacity, an waiting times may become
longer.longer.
• Aditional ships may be needed due to the speed reduction.Aditional ships may be needed due to the speed reduction.
• ??
Evolution of charter rates for Evolution of charter rates for containershipscontainerships
Source: Axs-AlphalinerSource: Axs-Alphaliner
The cellular fleetThe cellular fleet
• 400 cellular ships were delivered in 2007 for 1.36 million teu, 400 cellular ships were delivered in 2007 for 1.36 million teu, adding 13.9 % to the existing fleet.adding 13.9 % to the existing fleet.
• The cellular fleet on 1st of April 2008 comprises 4.375 ships for The cellular fleet on 1st of April 2008 comprises 4.375 ships for 11.13 million teu.11.13 million teu.
• During 2007, 606 cellular ships for 3.64 million teu were ordered, During 2007, 606 cellular ships for 3.64 million teu were ordered, at a global value of $ 53.2 billion.at a global value of $ 53.2 billion.
• On the 1st January 2008, the cellular ship orderbook reached 1462 On the 1st January 2008, the cellular ship orderbook reached 1462 ships for 6.96 million teu, representing 63.7 % of the existing ships for 6.96 million teu, representing 63.7 % of the existing fleet. fleet.
• Half of the capacity on order concerned 328 VLCS of over 8.000 Half of the capacity on order concerned 328 VLCS of over 8.000 teu.teu.
• 114 ships over 12.000 teu have been contracted, all in Korea.114 ships over 12.000 teu have been contracted, all in Korea.
• 23 cellular ships (26.134 teu) have been deleted in 2007. Of these, 23 cellular ships (26.134 teu) have been deleted in 2007. Of these, 22 were scrapped and one was lost.22 were scrapped and one was lost.
• More than 95 % of intercontinental trade moves by sea.More than 95 % of intercontinental trade moves by sea.
• Tankers and bulk carriers account for the largest shares of the Tankers and bulk carriers account for the largest shares of the world merchant fleet.world merchant fleet.
• The annual growth rate of container traffic in the past 20 years The annual growth rate of container traffic in the past 20 years averaged approx. 10 %. (Clarkson research).averaged approx. 10 %. (Clarkson research).
• This of course led to a further increase in container handling This of course led to a further increase in container handling figures in the world’s ports.figures in the world’s ports.
• In 2007 the number of containers handled rose 45 million teu, to In 2007 the number of containers handled rose 45 million teu, to reach the overall number of 465 million teu.reach the overall number of 465 million teu.
• Half of global container turnover takes place in the top 20 Half of global container turnover takes place in the top 20 container ports.container ports.
• Analysts expect to see this volume double by the year 2015.Analysts expect to see this volume double by the year 2015.
• Twelve of the top 20 ports lie in Asia region (seven in China).Twelve of the top 20 ports lie in Asia region (seven in China).
Top 20 container portsTop 20 container ports(x mil teu)(x mil teu)
Source: ISL Port DatabaseSource: ISL Port Database