Global trade up on 2016 and container lines on course for a profitable 2017 as the new shipping alliances start to impact.
Our June sea freight market report:
Container throughput in China during May was up 10.9% on 2016, according to the Ministry of Transport, with Hong Kong recording a 14.3% increase.
In the first five months of 2017 the number of containers carried to and from China rose 8.5% year on year.
This strong performance was repeated at many leading ports with the full year global port throughput growth now expected to reach 4.6% in 2017, compared with earlier projections of just 2-3%.
Alphaliner’s survey of over 150 ports shows that global container port throughput has surged by 5.8% in the first quarter.
Despite the increasing volumes container lines still had a disappointing first quarter, due mainly to higher bunker prices.
All the signs now are for a highly profitable second quarter, with investors being given “buy” ratings for lines, with Maersk and Hapag-Lloyd being particularly favoured, based on “improving industry fundamentals”, including better-than-expected demand growth of 5%.
The recent industry consolidations and launch of the three east-west shipping alliances has led to a 16% higher market share for the top six carriers at 67%.
The lines look set to consolidate their financial security as the alliances offer them better capacity management, increased scrapping levels and limited new vessel ordering.
The market has reacted strongly for the new alliances almost immediately with spot rates from China doubling and contract rates for the biggest shippers rising between 70 and 140%.
In addition to their Westbound increases the lines enjoyed an unprecedented pay-day from the backhaul capacity crunch, which had seen rates treble on the eastbound route.
A recent Moore Stephens survey found that shipping confidence had reached its highest rating in the three years, with 46% expecting higher rates and just 12% anticipating rates might soften.