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Container match-making

Wednesday, 18 January 2012 | 00:00
The container shipping industry currently resembles a high-school disco where prospective partners coyly circle around the dance floor eyeing one another up and down. The first to pair off were MSC and CMA CGM, before six lines of the New World and Grand Alliances decided to pool their resources from April. Other smaller trysts have also been set up and more are expected to follow.The need to jump in to bed with competitors is borne out of a desperation that comes from losing in the region of $5 billion collectively in 2011. Carriers simply have to find a way to save costs during a period of life- threatening low rates. Even then, such is the strain on cash reserves that large-scale lay-ups of tonnage cannot be avoided.
It is clear that some big changes are coming and, while shippers will need to keep a close eye on developments to minimise any supply-chain disruption, on the whole they can rest easy that prices will not skyrocket during 2012.
Drewry is forecasting an increase of 10% to average all-in rates over 2011, based on the calculation that carriers’ cash-flow pressures will force them into mass lay-ups by the middle of the year – forecast to be at least 8% of the fleet or around 1.3-1.4 million teu at the peak.
Despite the expected poor growth in the key headhaul markets, we still expect strong volumes for the emerging markets with global port traffic growth now forecast at 5.5% (down from 7.8% previously).
The financial situation in the airfreight sector is equally perilous. Casualties in December were two all-cargo airlines, Jade Cargo and Cargoitalia, which were forced to suspend operations.
Airfreight pricing declined markedly from October’s peak thanks to a disappointing peak season and market contraction.
Drewry’s Air Freight Price Index lost almost all the gains made in October, retreating by over 11% in the two months to December. At 101.2, the index ended 2011 at roughly the same level as last year and still above the trough of the summer months.
Source: Drewry Maritime Research
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