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As the traditional peak season of the shipping sector comes to an end, the spot rate declines over the past two weeks are a very clear indicator that the peak season did not really materialise, according to the recent Sea-Intelligence report.

Further to that, the Danish maritime data analysis company noted that there are “dark clouds looming over the horizon” for the Transpacific trade, in part linked to US consumer behaviour.

One element is the change in consumer behaviour during the pandemic (from services to goods), which is very likely to change back and have a negative impact on import volumes, according to the report.

“Digging deeper, we see that in recent months, the growth is concentrated on goods which are not predominantly moving in containers,” said Alan Murphy, CEO of Sea-Intelligence.

As shown in the figure, the highest growth is for recreational goods and services, which rose from 12% in 2019 to 17.2% by July 2023. Moreover, the Danish analysts note that the largest growth within this category is exhibited by ‘Video, Audio, Photographic, Information Processing Equipment, and Media’.

The ‘Information Processing Equipment’ is also growing fast mid-2023 with the main driver of strong growth within this category clearly seen to be Computer Software and Accessories; and software is mainly not moving in containers, which means that this strong boost to consumer spending does not benefit container shipping lines.

“Another major growth component on goods spending is the overall ‘Vehicles’ category. New vehicles are indeed growing well, but once again, these are mainly not containerized,” said Murphy.

Source: Container News

To gauge which of the three container carrier alliances recorded the fastest post-pandemic recovery in schedule reliability, Danish maritime data analysis company Sea-Intelligence pegged their lowest recorded schedule reliability during the pandemic as month “0” and then looked at the change from that baseline in the next months.

Source: Sea-Intelligence.com, Sunday Spotlight, issue 630

Figure 1 covers the Asia-North Europe trade lane. “In just the second month after dropping to its lowest point, 2M had improved schedule reliability by 20 percentage points, whereas the improvements for Ocean Alliance and THE Alliance were both under 10 percentage points,” pointed out Sea-Inteligence analysts.

By the seventh month, 2M almost reached a recovery of 50 percentage points, with the other two alliances lagging severely behind. Ocean Alliance only got to the 45-percentage point mark by the 17th month, with THE Alliance taking 25 months just to get within a hair of the 50-percentage point mark.

“In short, the schedule reliability recovery rate for 2M was far above the other two alliances,” concludes Alan Murphy, CEO of Sea-Intelligence.

In fact, on both Asia-Europe trade lanes, 2M has seen rapid improvements in schedule reliability after dropping to its lowest point during the pandemic, however, while they continued on this trajectory on Asia-North Europe (as previously mentioned), their rate of recovery on Asia-Mediterranean slowed down considerably, according to the analysis.

“Ocean Alliance on the other hand, while having a relatively slower rate of improvement on Asia-North Europe, has largely been consistent in schedule reliability improvements in the months after their lowest figure of the pandemic,” noted Murphy, adding that “THE Alliance has seen a relatively slower rate of recovery on Asia-North Europe, picking up in recent months, while seeing the opposite trend on Asia-Mediterranean.”

Source: Container News

After two very profitable years for the shipping lines, the market is shifting into a post-pandemic normality, as reported by Sea-Intelligence.

More specifically, while the fourth quarter of 2022 gave a first glimpse into what this might look like, the first quarter of 2023 was the first quarter where the carriers’ operating profits took a real hit.

Additionally, this continued into the second quarter of 2023, with the combined earnings before interest and taxes (EBIT) dropping by 90% year on year to a little over US$3 billion.

Further to that, both ZIM and Wan Hai once again recorded operating losses. While ZIM has had profitability issues in past quarters, this was a first for Wan Hai in since 2012.

The figure shows the EBIT/TEU of the shipping lines that publish both their EBIT and their global transported volumes.

“None of these shipping lines were able to sustain their EBIT/TEU figures in 2023, with the largest 2023-Q2 EBIT/TEU recorded by OOCL of US$305/TEU. In contrast, the smallest EBIT/TEU in 2022-Q2 was US$1,377/TEU,” noted Sea-Intelligence analysts.

Also, Maersk with US$207/TEU, Hapag-Lloyd with US$298/TEU, and ONE with US$137/TEU all recorded EBIT/TEU within a much narrower range of US$130-300/TEU.

In all of this, ZIM recorded a negative EBIT/TEU of -US$195/TEU. Basically, they lost US$195 for every TEU that they moved in the second quarter of the current year.

A large reason for the decline in profitability is the decrease in the freight rates, which fell by 48% to 67%, according to shipping lines’ data. The drop in box volumes has also played a role in the lower profits.

“What is surprising, however, is that ZIM, one of the only two shipping lines to record an EBIT loss, grew their volumes 0.5% globally, and by roughly 13% on both Transpacific and Asia-Europe,” noted Alan Murphy, CEO of Sea-Intelligence.

Source: Container News

Danish maritime data analysis firm Sea-Intelligence analysed the trend in ocean carriers’ schedule reliability levels for May 2023.

The report contains the global highlights from the entire study because the research is extremely detailed and examines schedule reliability across 34 different trade lanes and 60+ carriers.

According to the Danish analysts, global schedule reliability has increased month on month, with the most recent improvement of 2.7% points in May 2023. With this boost, schedule reliability has risen to 67%. Also, schedule reliability has increased by 30 percentage points since 2022.

The average delay for late vessel arrivals, on the other hand, increased a bit, by 0.04 days month on month to 4.39 days. Despite the gain, the May 2023 number was still 1.86 days lower that the same month last year and better than any of the pandemic years.

Maersk had the highest schedule reliability of any top-14 carrier, at 73.5%, followed by Wan Hai at 71% and MSC at 70.4%. Seven carriers had schedule reliability of 60%-70%, while the remaining carriers had reliability of 50%-60%. Unlike previous months, the gap between the most and least reliable carriers widened significantly in May 2023.

“With schedule reliability of 52.6% in May 2023, HMM was the least reliable carrier. In April 2023, 13 of the top 14 carriers improved month-on-month in schedule reliability, with HMM registering the only fall of -2.5% points. On a year-over-year basis, all 14 carriers improved schedule reliability by double digits,” noted Alan Murphy, CEO of Sea-Intelligence.

Source: Container News

Sea-Intelligence reported that in terms of TEU*Miles (which also accounts for the distance a container has to travel), there was a sharp 6-month growth reduction that reverted to “only” a minor level of growth decline in March 2023.

“This new trend continued in April as well, albeit somewhat less strong,” noted the Danish maritime data analysis firm.

Sea-Intelligence analysts explained, “When we look at a cross plot of Y/Y demand growth in April 2023 against the share of global TEU*Miles for the global trades, we see that while the Far East to North America and Far East to Europe trades are substantially larger than the rest, the low North America imports are causing the growth decline.”

This is corroborated by the fact that the TEU*Miles growth minus the Far East to North America trade rebounded to positive growth in March and stayed there in April 2023 as well, according to the report.

“However, as we know, because of the trade imbalances, it is the strength of the head-haul markets which is the true measure of whether the ships are full or not,” stated Alan Murphy CEO of Sea-Intelligence.

The figure depicts the Y/Y growth in head-haul TEU*Miles. As can be observed, the market recovery deteriorates slightly again in April. Once again, this is mostly due to the continued decline in the Far East to North America volume.

“This very poor performance should furthermore be seen in the context of the inventory developments in the US we covered in issue 617 of the Sunday Spotlight. Therein, it was clear that despite the drop in imports, inventory sizes were still not declining, which remains problematic,” said Alan Murphy.

In essence, Sea-Intelligence sees a picture where global demand is indeed recovering in terms of growth rates, but with the trade to North America as well as key intra-regional trades, not being a part of this recovery.

Source: Container News

Sea-Intelligence said there were indications of a weakness in the market in the second half of 2022, which has manifested fully in the first quarter of 2023.

Revenues declined quite sharply, in the range of 35%-70% year on year, while in terms of earnings before interest and taxes (EBIT), there was a stark difference for the first quarter of 2023 versus the previous two years.

Overall, the first quarter of 2023 EBIT was US$7 billion versus a staggering US$43.93 billion in the first quarter of 2022, and even lower than the US$16.28 billion EBIT of 2021-Q1. “That said, it is still markedly higher than the US$621 million EBIT of the first quarter of 2019,” pointed out a Sea-Intelligence official.

In fact, the combined EBIT drop year on year was a significant -81% (across the same set of carriers).

This can also be seen in the EBIT/TEU figures, where none of the shipping lines were able to sustain their first quarter of 2022 EBIT/TEU figures into 2023. On average, the shipping lines recorded EBIT/TEU of US$330/TEU in 2023-Q1, down 81% from 2022-Q1’s average of US$1,829/TEU, but still vastly above the just US$53/TEU average of 2010-2021.

“The only silver lining, if you can even call it that, is that while Y/Y comparisons with 2022-Q1 will show a horrifying picture due to the unnaturally high numbers in that year, the reality is that the profitability of the shipping lines has increased considerably compared to the pre-pandemic levels, and looking at the current market indicators, it does not seem that the shipping lines are going to drop back down to those low levels in the short term,” commented Alan Murphy, CEO of Sea-Intelligence.

Source: Container News

Danish maritime data analysis company Sea-Intelligence has reported noticeable improvements across all metrics of schedule reliability and average delay on a global, carrier, carrier alliance, and trade lane level in the first quarter of 2023.

This continues a trend that we saw for most of 2022 as well, with the metrics now closer to the pre-pandemic levels than to the below-par service levels of the pandemic-impacted years.

On a global level, schedule reliability increased to 58.3%, translating to a 3.4% increase quarter on quarter, and a 24.9% improvement year on year.

In a similar vein, the average delay for all vessel arrivals improved to 1.70 days, dropping by 2.88 days year on year, while the average delay for late vessel arrivals improved to 5.23 days, a notable reduction of 2.43 days from the previous year’s levels.

TOP 14 ON-TIME PERFORMANCE IN 2023-Q1

Source: Sea-Intelligence.com, Sunday Spotlight, issue 613As for the top-14 shipping lines (shown in Figure 1), all of them recorded double-digit year on year improvements, with four of them recording improvements of over 30%. Maersk was the most reliable carrier in the first quarter of 2023 with schedule reliability of 63.6%, with MSC the only other carrier with schedule reliability higher than 60%.

Additionally, 11 of the 12 remaining shipping lines were within 50%-60%, with Yang Ming the only exception with a schedule reliability of 49.9%.

The three carrier alliances also recorded sharp Y/Y improvements in schedule reliability, although only 2M and Ocean Alliance outperformed the industry on the East/West alliance trades, but that too by under 2 percentage points. THE Alliance, on the other hand, underperformed the industry by a significant -12.1 percentage points.

Alan Murphy, CEO of Sea-Intelligence, commented, “All of the six major East/West trades recorded double-digit year-on-year improvements in schedule reliability, although all of them underperformed compared to the global industry average.”

Source: Container News

Danish maritime data analysis company Sea-Intelligence showed schedule reliability data through March 2023 in its latest report.

Source: Sea-Intelligence.com, GLP Report, issue 140

Source: Sea-Intelligence.com, GLP Report, issue 140

March 2023 saw a further month-to-month gain in global schedule reliability, this time by 2.4 percentage points, reaching 62.6% and bringing it close to the 2020 result for the same month, according to the analysis, while schedule reliability increased by a startling 26.8% points year-over-year.

The typical delay for late vessel arrivals likewise went downhill, falling by 0.26 days M/M to 5.03 days in March 2023. “It is now only marginally higher than at the same point in 2020, and a significant -2.41 days lower Y/Y,” noted the Danish analysts.

Source: Sea-Intelligence.com, GLP Report, issue 140

According to Sea-Intelligence report, Maersk was the most reliable top-14 carrier with schedule reliability of 68.6%, followed by MSC with 67.7%, while five more carriers had schedule reliability of over 60%. On the other hand, Taiwanese ocean carrier Yang Ming was the least reliable carrier with schedule reliability of 53.4%.

The remaining carriers all had schedule reliability of 50%-60% and were quite close to each other.

Sea-Intelligene’s analysts noted that 13 of the top-14 carriers recorded a M/M improvement in schedule reliability in March 2023, with ZIM recording the largest improvement of 7.1 percentage points. South Korean box line HMM, on the other hand, was the only carrier with a M/M decline in schedule reliability, of -0.1 percentage points.

However, on a Y/Y level, all 14 carriers recorded double-digit improvements.

Source: Container News

Shipping lines reported very strong financial results for 2022, according to the latest report by the Danish maritime data analysis company Sea-Intelligence.

At the time of writing, 12 of the largest container carriers have published their financial results – minus CMA CGM, which did not publish EBIT, COSCO, ONE, PIL, and MSC, which is privately held and does not publish accounts.

The combined EBIT figure for the 12 lines having announced their EBIT figures in 2022-FY was US$95 billion and adding in these remaining carriers increases it to an estimated US$208 billion, according to Sea-Intelligence report.

However, the Danish analysts noted that there is a weakness in the market that is highlighted by a sharp contraction in transported volumes, while the freight rates, though higher Y/Y, also seem to have slowed down.

Source: Sea-Intelligence.com, Sunday Spotlight, issue 607

The scale of the current profitability of the carriers can be seen in the figure, which shows the EBIT/TEU of the lines that report on these figures.

“While the larger shipping lines have close to doubled their EBIT/TEU, the smaller ones were only able to increase it by a relatively smaller margin,” pointed out Alan Murphy, CEO of Sea-Intelligence, adding that “even then, the EBIT/TEU across the board continues to dwarf that of the previous years.”

Furthermore, we can see that HMM reported the largest EBIT/TEU and was the only ocean carrier so far to record over 2,000 EBIT/TEU in 2022‑FY, followed by ZIM with 1,815 EBIT/TEU. The remaining shipping lines were within a range of 1,200‑1,600 EBIT/TEU.

Source: Container News

While North America West Coast port volumes have started to contract sharply in the third quarter of 2022 (both Y/Y and on an annualised basis compared to 2019), the same is not the case for the North America East Coast ports, according to Sea-Intelligence.

The Danish shipping data analysis company said that the year-on-year (Y/Y) laden inbound growth in 2022-Q3 was between 4%-11%, and the annualised growth was between 7%-10%, as it is shown in the Fig.1.

Total handling volumes also exhibited a similar growth trend, albeit shifted slightly downwards, according to the report. There is also an increase in the laden export volumes, growing Y/Y for four consecutive months in September, which shows that the carriers are starting to clear out laden export backlog a little more.

Based on that, empty exports are still growing at a rate of 17%-20% Y/Y, when annualised against 2019, according to Sea-Intelligence’s analysts.

There is also another key takeaway from Sea Intelligence’s analysis, which is that there is a continuing volume shift from the West Coast to the East Coast ports, where handling volumes on either coast are closer to parity, whereas, in the past decade, North America West Coast ports have handled considerably more volumes than the East Coast ports.

This is shown in the Fig.2, where a number greater than 1 means more volumes are handled in the West Coast ports, and vice versa.

Source: Container News