Tag: shipping market

Ship-owners feel 2012 may be worse Weathering lows - that's what the shipping industry was struggling to do during whole of 2011. And that is what it may be doing in 2012 too. The waning freight market, shrinking demand for ocean transportation of commodities, over-supply of new vessels, volatile forex market and a squeeze on earnings - these were the challenges faced by shipping companies in 2011, considered one of the worst years for the industry in the last 20 years or so.With the dawn of the New Year, ship-owners are bracing themselves for another turbulent year, even as they anxiously scour the globe for any hint of a demand pick-up.With the global economic outlook not appearing much healthier than what it was in the year that went by and increasing supply of new ships hitting the market, ship-owners feel 2012 may be even worse.Industry players say owners may be forced to continue to keep a part of their fleet idle, as they did last year when freight rates hit the floor, several notches below the cost of operation. It is estimated that some 160 container vessels and another 150 in the bulk trade globally are getting mothballed as the ...

COSCO Chairman says US should create a more favorable business environment for China At a time of slow recovery and high unemployment, China's role in helping to boost the United States economy has become more obvious. This is more recognized in states where Chinese companies have left good footprints with its investment records. China Ocean Shipping (Group) Co (COSCO) is one of them.In 2002 the Port of Boston was facing a shutdown when the shipping giant Moeller-Maersk Group canceled its services to the port. The Massachusetts state government invited COSCO, one of the world's largest liner shipping companies, to invest and help. Led by its current chairman Wei Jiafu, COSCO negotiated a deal with the Massachusetts state and opened a route from Boston directly to Chinese ports. The contract immediately saved about 9,000 dockworkers' jobs in the New England area."COSCO offered a helping hand then and the (Massachusetts) state and people there really appreciated it," recalls Wei, 61, who has more than 10 years' sailing experience as a commercial shipping captain.Wei is a familiar figure in the US. In 2009 BusinessWeek listed him among the 40 Most Influential People in China, and he has received a number of awards in ...

The shipping industry is going through a tough period The shipping industry may be going through a tough period, but some companies are sensing an opportunity in it. With ship prices declining by over 65 per cent, they are seeing it as a great chance of acquiring assets at a cheaper price. For instance, a 10-year-old very large crude carrier (VLCC), which was earlier sold for $75-80 million, is now available for $23-25 million."We are keeping our eyes and ears open for any opportunity that may arise. Globally, there are distress sales happening since the fall in trade has taken a toll on shipping companies," said A R Ramakrishnan, managing director of Essar Shipping.Though companies bleeding like the Shipping Corporation of India have put on hold their expansion plans, it's the best time for those with deep pockets to expand. According to experts, the best time to expand is when prices are down and one can see some light at the end of the tunnel in terms of trade picking up."The general sense is markets can go down further and one does not want to be stuck with an asset. But it's an opportunity one has to keep a close ...

Centre plans to form consortium to invest in port facilities abroad India's ambition to create maritime assets globally is taking firm shape with the Union Shipping Ministry planning to make select major ports and private investors part of what is temporarily being called 'India Ports International,' a consortium that will pioneer Indian investments in port facilities worldwide.The proposals that have been received for forming a corporate body to head international investments by India in the ports sector are being examined. Analysis of the proposals is expected to be completed in 2-3 months, said Union Shipping Secretary K. Mohandas here on Thursday.Mr. Mohandas was here to attend the floating of India's first indigenous aircraft carrier, being built by Cochin Shipyard.He said that the year 2011 was 'annus horribilis' for the shipping sector in the country, owing largely to the worldwide economic recession. He said "The year 2011 has been the worst year in recent history" as he pointed to the continuing economic recession and excess capacity created on the waves of an economic boom prior to 2008. He said that India's flag-bearer Shipping Corporation of India had not done well and traffic at major ports had not grown as expected.For the ...

The shipping industry is notoriously cyclical, the ferocity of its volatility was on display It has been a painful experience given that 2010 was a time when container shipping lines rebounded into healthy profits after the global recession.It is as if the industry had been condemned to relive that grim year, 2009, when container shipping lines suffered a collective US$19.5-billion (Bt619-billion) loss, its worst year in history according to many experts.Back then, freight rates fell below the cost of moving the cargo, there were so many spare ships that many were mothballed and parked out in the middle of the ocean, and many shipping firms either went under or were bailed out by governments.Things did not get that bad this year, but it has been uncomfortably close to a rerun.First, there are again too many ships, a result of overbuilding in previous years. The building has continued, with shipping lines such as Evergreen, Neptune Orient Lines (NOL) and Maersk Line all taking out their chequebooks and adding to their supply. These vessels are set to come on stream over the next two years.A combination of more ships and slowing trade growth amid the economic slowdown in the United States and ...

Baltic index falls for 7th day The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell for a seventh session on Wednesday as a seasonal drop in activity and lower panamax rates weighed.The overall index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, fell 22 points or 1.17 percent to 1,856 points.The Baltic's panamax index fell 2.16 percent. Average daily earnings for panamaxes, which usually transport 60,000-70,000 tonne cargoes of coal or grains, fell to $13,742.The panamax index swung higher last week due to increased grain activity, which analysts say is not typical for this time of the year."It seemed to be a temporary increase. The panamax index is pointing to one or two weeks of subdued market condition," said George Lazaridis at Greek broker Intermodal.The market for soybeans and wheat has been modest, underpinned by moderate export demand and slow grain movement. China, which buys about 60 percent of soybeans traded internationally, does not need many more January cargoes, traders said.Analysts said the overall index has also been pressured by minimal activity in coal and iron ore cargoes.The Baltic's capesize index fell 1.09 percent on Wednesday, ...

Down 0.37 percent to 1,878 points The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, stayed negative for a sixth day on Tuesday as a recent upsurge in capesize rates began to fade ahead of the holiday season.The index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, dipped 7 points or 0.37 percent to 1,878 points."It will trend a little bit lower until the New Year, when we should see a jump in activity as people return from holidays," said Nigel Prentis, head of research, consulting and advisory with HSBC Shipping Services Ltd."We should see a lift in rates in early New Year," he said.However, rates may be affected as vessels of all sizes are expected to be delivered from shipyards next year, adding to the glut in the industry. The Baltic's capesize index fell 0.17 percent on Tuesday, with average daily earnings falling to $31,369. Capesizes typically transport 150,000 tonne cargoes such as iron ore and coal.Capesize rates had climbed in the last few weeks and touched a year high last week as coal and iron ore exports to China from Australia and Brazil have risen."There ...

Shippers should be given at least three-six months before the implementation The recession-hit shipping companies will get a breather if the cargo support scheme suggested by a Government-appointed working group is implemented.The group wants all shippers (exporters and importers) with more than a pre-specified annual turnover should compulsorily use Indian ships for carrying a third of their goods. Their export incentives will be linked to fulfilling the shipping criteria, said a member of the working group.The group has suggested that shippers should be given at least three-six months before implementing the one-third cargo support scheme. Currently, Indian ships carry less than nine per cent of the country's cargo. The scheme is expected to not only boost the cargo share of national carriers, but also will help expand Indian tonnage.Currently, India has a fleet of 1,119 ships of 11 million gross registered tonnage or grt.In container cargo, the share of Indian ships is only 3.4 per cent. Even in oil and petroleum products, in which national bottoms enjoyed more than 50 per cent share a decade ago, the share has come down to 15 per cent."The scheme will be a game changer for Indian shipping. It will automatically, increase the national ...

Prospects for shipping industry unlikely to improve much Shipping firms are operating in an unsustainable economic environment with prospects unlikely to improve much in 2012 due to high fuel prices, low freight rates and slowing demand, said the head of the world's sixth largest container firm.The container freight market has been struggling with an over-capacity of ships and may be forced to consolidate further, said Kenneth Glenn, president of APL Co. Pte. Ltd., the shipping unit of Neptune Orient Lines.''Clearly the (industry) losses that you see now and that you are likely to see in the fourth quarter are not sustainable over the long term,'' APL's Glenn told the Reuters Manufacturing and Transportation Summit on Monday.''To some degree, that will result in actions that could change the playing field and could change the level of the competitive environment.''NOL, Maersk Line, CMA CGM and many other shipping firms, reported losses in the third quarter due to the difficult market.Glenn, however, did not expect a repeat of the severe downturn in 2009, when a collapse in trade cost the industry an estimated $19.5 billion. As for APL, Glenn said he sees high-single digit volume growth next year after taking into account the ...

Capesize gains set to slow in 2012 The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose for a third day on Friday helped by firm iron ore trade to China with earnings for the larger capesizes jumping to their highest in over a year.Nevertheless, the shipping sector is expected to see more turmoil in coming months as a supply glut and growing economic gloom keep earnings under pressure with growing worries over the outlook for Chinese raw materials demand.The overall index rose 40 points or 2.13 percent to 1,922 points."Despite the demand headwinds from muted steel production in China and slowing industrial production, the capesize segment has been remarkably resilient. Mix of factors including higher port congestion, recovery in coal exports from Australia and increasing Chinese iron ore imports from Brazil, aiding tonne mile have supported the segment," RS Platou Markets said."Declining steel output and slowing industrial production remains a key challenge going into 2012 for dry bulk demand and we still expect rates to see a gradual decline."China's industrial output growth hit its slowest pace in more than two years in November and inflation tumbled as economic conditions deteriorated, raising expectations Beijing will ...