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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

Sea Intelligence, with the help of the Blank Sailings Tracker, looked at how carriers are reacting to the collapse of demand, particularly for imports to North America and Europe, in terms of blanking sailings.

The following figure shows a snapshot of the additional blank sailings that were announced (or unannounced ones that were captured by Sea-Intelligence) for the week 42-52 period.

The number of void sailings has been ramped up drastically on the Transpacific, but not so much on Asia-Europe, according to Sea-Intelligence’s report.

There have been 34 additional blank sailings on Asia-North America West Coast, and 16 on Asia-North America East Coast. For the former, carriers have announced an extra 7-11 void sailings in all but five weeks of the analysed period.

However, for weeks 51 and 52, carriers have scheduled no blank sailings on Asia-North America West Coast.

“This is a reflection of the carriers’ indecision as to how to approach the potential pre-Chinese New Year rush. It appears more to be a wait-and-see approach, in terms of whether there will be a seasonal demand spike,” commented Alab Murphy, CEO of Sea-Intelligence.

On the other hand, on Asia-Europe, there is not a similar trend, with Asia-North Europe only seeing an additional six void sailings, and Asia-Mediterranean seeing an additional four blank sailings.

Source: Container News

Shipping data analysis firm Sea-Intelligence reported that it is clear the underlying costs for operating liner services have increased significantly, compared to the past two years.

The size of that increase is important in assessing what the baseline rate level might settle at once we get through the present rate renormalisation, according to the Danish analysts.

As a small number of container carriers provide detailed data about their costs, Sea-Intelligence has considered German shipping company Hapag-Lloyd, which publishes this type of data with the most granularity, on a systematic basis, and with several years of history, as a representative of the market.

The Hamburg-based container line has the following major cost categories:

• transport expenses,
• personnel expenses,
• depreciation, amortisation, & impairments.

Transport expenses are subdivided into bunker, handling & haulage, equipment & repositioning, vessels & voyages (excl. bunker), and expenses for pending voyages (an exceedingly small element and will not be analysed here).

The following figure shows a comparative overview of the increases in each of these cost elements. The unit cost is calculated across transported volumes in that quarter and the blue bars are the three main cost categories, while the green bars are the subcomponents of transport expenses.

Bunker costs are here seen to have experienced the largest relative cost increase compared to 2019, according to the Danish analysts, who noted, “When we account for the relative share, the cost increase in handling and haulage is accountable for 37% of the unit cost increase, followed by bunker fuel which is accountable for 30% of the cost increase.”

Alan Murphy, CEO of Sea-Intelligence pointed out, “This means that two-thirds of the inflationary pressure is related to fuel, handling and haulage. This is also a key pointer as to where the carriers are likely to focus in the months ahead, as the ongoing market downturn will force carriers to focus on cost reductions.”

Source: Container News

Danish maritime analysis company Sea-Intelligence looked at the financial and volume results posted by the major container carriers for the second quarter of the year.

In terms of EBIT (Earnings Before Interest and Tax), the leading shipping lines recorded a combined EBIT of US$41.6 billion, except French carrier CMA CGM which has only issued a press release so far, which does not list their EBIT.

This is not only higher than the combined Q2 EBIT of the past 11 years but is also right at the top with the 2021-Q4 and 2022-Q1 EBIT; once CMA CGM’s EBIT is included in the list, 2022-Q2 would likely become the most profitable quarter in the last decade.

“We do not mean this as a value judgement on whether shipping lines making money is a good or a bad thing, and we note it has generally been an unprofitable business for the past decade or so; we are merely pointing out the unprecedented nature of the current market dynamics,” noted Sea-Intelligence analysts.

The following figure shows the EBIT/TEU for the carriers that publish both their EBIT and their global volumes.

“The 2022-Q2 EBIT/TEU figure of each of these box lines dwarfs each of the previous years, with the latter hardly relevant in context of the outsized EBIT/TEU numbers that we are seeing right now,” pointed out Sea-Intelligence in its report.

These figures are backed by a Y/Y increase in freight rates in 2022-Q2, according to the Danish maritime data firm.

However, Alan Murphy, CEO of Sea-Intelligence, believes that this level of profitability might not continue into the third quarter, due to the fast-falling freight rates, and the slowdown in global demand.

Source: Container News