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Blog Archives

Sea-Intelligence reports strong volume growth on North America East Coast

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

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Sea-Intelligence reports rapid ramp-up in Transpacific blank sailings

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

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Sea-Intelligence points to main freight rate inflation drivers

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.

Source: Sea-Intelligence.com, Sunday Spotlight, issue 587

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

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Major container lines make history with US$41.6 billion earnings in 2022 Q2

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

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