Sam Chambers April 11, 2023 Splash247.com

NASDAQ-listed Euroseas is setting the pace in the remerging container charter scene, announcing details today of a three-year-plus charter of a newbuild feeder for a firm $48,000 a day.

The Greek owner has just taken delivery of the 2,800 teu Gregos from Hyundai Mipo Dockyard in South Korea and sent it out on a 36 to 40-month charter to Asyad Lines, an Omani carrier.

The Gregos is the first of nine newbuilds Euroseas has contracted.

Aristides Pittas-led Euroseas has been making headlines for its solid charter deals secured of late.

After being fixed and failed in late March, Euroseas’ 2009-built, 4,253 teu Synergy Keelung was fixed last week for a minimum 24-month period at $23,000 with Thailand’s Regional Container Lines (RCL), a rate brokers Braemar described as “remarkably firm” given the fact that last panamax fixture managed to achieve a 12-month period only and Euroseas was able to achieve a 5% rate increase for a period twice as long.

“Not surprisingly most owners have readjusted their period ideas accordingly – particularlay for vessels in the 3,000+ teu segment, and given the low supply, other operators are likely to align with the new longer period trend,” Braemar noted in its latest container weekly report.

Charter rates rising markedly for all sizes of ships is reflected in the Alphaliner Charter Index, which is now, for the first time since June 2022, on a modest but visible rising trend.

 Sam Chambers April 13, 2023 Splash247.com

Toronto-based Brookfield Infrastructure Partners is buying Triton International, the world’s largest owner of containers, for $4.7bn.

“We believe this transaction provides an excellent outcome for all of Triton’s stakeholders,” commented Brian Sondey, CEO of Triton.

The sale represents a total shareholder return of approximately 700% since the 2016 merger of Triton and TAL International, Sondey said.

“Triton is an attractive business with highly contracted and stable cash flows, strong margins and a track record of value creation,” said Sam Pollock, CEO of Brookfield Infrastructure. “This transaction provides Brookfield Infrastructure with a high going-in cash yield, strong downside protection, and a platform for growth in the transportation and logistics sector. The transaction consideration also provides the opportunity for Triton shareholders to benefit from owning a globally diversified portfolio of infrastructure assets within a platform that has a proven history of generating long-term value for its shareholders.”

 Sam Chambers March 16, 2023 Splash247.com

The lull in box volumes is resulting in falling congestion and also in changes in container flows as reflected in the Container xChange Container Availability Index. 

The index, which measures the proportion of weekly import to export flows at ports around the world, shows that the share of imports from the total volumes handled at the ports of Los Angeles and Long Beach, America’s two largest gateways, has fallen 10% compared to last year.

As of Sunday, the number of containerships in US coastal waters had fallen to less than half of the count a year earlier, according to Bloomberg.

At Ningbo, meanwhile, China’s second largest boxport, after two years of handling more exports than empty returns and imports, the share of imported containers crossed into and has remained the majority since late last year as demand for exports fell. 

The sight of empty containers stacking up at ports across China has been something covered regularly by Splash in recent months. There were more than 5m empty standard containers stacked at ports across China in early February, twice as many as pre-covid, according to data from Dalian Maritime University.

In a sign of just how drastically the market has fallen, recently listed box booking platform Freightos said earlier this week it expects revenue growth of 15% to 21%, down from a prior forecast of 87%.

“Global shippers must now navigate in a tricky environment, as carriers still rely largely on blank sailings when they should close services outright,” Peter Sand, chief analyst at freight rate platform Xeneta, told Splash.

”We see 2023 as a year of excessive capacity management by the carriers,” Sand said, going on to list the likely order of defensive measures the lines will issue from their playbook: blank sailings, hot followed by cold idling, and finally demolition. Xeneta expects 400,000 teu to permanently leave the fleet in 2023. Year-to-date about 30,000 teu has been sold for demo.

Drewry’s World Container Index, a spot index published every Thursday, was down another $16 today to $1,790 per feu, 82% down from all-time highs recorded in September 2021.

March 6, 2023 Martina Li Asia Correspondent

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Evergreen Marine Corporation has ordered 12,500 containers from Singamas Container Holdings for US$34.3 million, as the Taiwanese liner operator works towards expanding its business, despite the weak market conditions.

In January, Evergreen’s general manager Eric Hsieh unveiled plans to order 40,000 more containers – after having spent US$51.53 million on 9,800 new dry containers and 6,171 used boxes from Evergreen’s Singapore subsidiary in 2022. Last year, Evergreen also spent US$65.24 million to buy 7,800 reefers from Dong Fang International Container.

Evergreen also purchased its Singapore unit’s office for US$32 million to operate its own agency in the South-east Asian city-state, as the group expects delivery of 51 ships over the next two years.

Hsieh appeared to have been optimistic because of the pick-up in freight rates just before the Chinese New Year holiday, saying that Evergreen vessels on the Transpacific were fully loaded and lines attempted to impose a general rate increase (GRI) of US$1,000-$2,000 per FEU that month.

Hsieh had acknowledged there were long-running concerns about overcapacity. Alphaliner has forecast container shipping supply to grow by about 8% in 2023, with demand rising by just 2.7%. He said then, “We aren’t worried by the recent correction in container freight rates and we’re sticking to our expansion plans to boost our competitiveness.”

However, Hsieh thinks that stricter environmental regulations, such as the need for owners and operators to start meeting the requirements of the Carbon Intensity Indicator (CII), could remove about 10% of capacity from the market. The tonnage overhang therefore “may not be as serious as imagined”.

By Martina Li in Taiwan 28/02/2023 The Loadstar

Zhong Gu Shan Dong Photo: VesselFinder

UPDATE: This article has been changed to reflect that there is no relationship or affiliation between Safetrans and Trasfar Shipping.

Safetrans Line has launched a liner service linking China with Morocco and Russia, joining several other newcomers on the Russian lane.

According to Linerlytica, the St Petersburg Direct service, calling at Qingdao, Shanghai, Ningbo, Nansha, Tangier (irregular), St Petersburg and Qingdao, began yesterday with the newly chartered 3,469 teu Heng Hui 2.

Meanwhile, three chartered ships from Zhonggu Logistics, of 3,398-4,872 teu, which Singapore line Transfar has diverted from its waning transpacific service, will soon join the loop, as will three more in April to boost frequency.

In its latest report released yesterday, Linerlytica remarked: “One year after the Russia-Ukraine conflict started on 24 February 2022, there have been significant shifts in the Russian container shipping landscape after sanctions shut off most of the traditional Baltic trade to Russia.”

Players unfazed by sanctions targeting Russia have jumped into the fray, with newcomers such as Safetrans, Torgmoll, Reel Shipping and OVP Shipping adding ships to the trade.

Congestion at the Russian Far East gateways of Vladivostok and Vostochny have generated demand for new services from Asia to the Black Sea and Baltic gateways of Novorossiysk and St Petersburg.

MSC retains a considerable presence in the Russian trades with feeder operations in all three Russian gateways while reputational risks have seen the other key European carriers withdrawing completely from the market.

Linerlytica analyst Tan Hua Joo told The Loadstar: “The Russian market is booming due to high cargo demand, with the Vladivostok gateway currently severely congested and carriers are opening new services to the Black Sea and Baltic gateways. Depending on which gateway, rates are highly elevated, starting from $6,000/feu.”

OVP, originally an LNG tank shipping business that was established in 2020, began container shipping operations connecting Vladivostok and Novorossiysk with China in June 2022. This week, OVP will offer connections to St Petersburg through slot purchases on Safetrans’ service.

Linerlytica estimates there are now 89 ships totalling nearly 92,000 TEU, serving the Russia Far East trade.

Russian container carriers have been acquiring tonnage to meet healthy demand, even as the overall freight market is bleak.

Anecdotal accounts from ship brokers indicate that FESCO and other Russian interests have been actively buying ships, as freight rates for Russia-linked routes remain steady.

Alphaliner reported that in the last 18 months, FESCO has purchased four boxships, with the latest additions being the 2008-built 698 teu FESCO Tatarstan (ex JRS Corvus) 2010-built 704 teu Acacia Ming, which were bought from Chinese owner Goto Shipping for $8.1m and $10m, respectively, in January.

FESCO Tatarstan has been carrying cargoes between Russian Far East ports and Asia, while Acacia Ming is pending delivery to the Russian operator, which just launched a new service linking Russia, India and Turkey.

FESCO currently owns 17 ships with capacities ranging from 508 to 3,091 teu, making it the 43^rd largest liner operator, with total capacity of over 29,000 teu. FESCO appears to be renewing its fleet, having sold the 1998-built 1,740 teu Vladivostok for demolition in January.

Russian forwarder Transit LLC, which launched its Russia-China liner service in the wake of international sanctions targeting Russia’s invasion of Ukraine, had bought its second ship in October. The 2005-built 660 teu Transit Lugovaya (ex Run Xing) was bought from Qingdao China Gem Ship Management, three months after the 2008-built 704 teu Transit Shamora (ex Run Chang) was purchased from the same owner. Supplementing its owned pair are six chartered vessels, taking Transit’s total capacity to 5,500 teu, making it the 100^th largest liner operator.

Brokers also told The Loadstar that Malaysian feeder operator MTT Shipping had sold the 2000-built 1,740 teu Pasir Gudang to Russian interests for $10m in January. The ship has been renamed Crystal St.Petersburg and reflagged from Malaysia to Sierra Leone. While the identity of the beneficial owner appears to be obscured, Crystal St.Petersburg is now classed by the Russian Maritime Register.

Sam Chambers January 17, 2023 Splash247.com

As the liner shipping party comes to a close, ships are cascading back from the long-haul east-west lanes to regional trades.

Latest data from consultancy Linerlytica shows that the total boxship capacity employed on the intra-Asia trades are rising again after a two-year decline.

Intra-Asia capacity peaked in early 2020 at 3m teu but fell to a low of just 2.6m teu by mid-2022 as carriers sought to maximise profits by deploying any available capacity, however small, on the transpacific and Asia-Europe tradelanes.

New Linerlytica data shows the slide has reversed with intra-Asia capacity now back to 2.8m teu with more newbuilds set to enter to the region soon.

Rates on many routes in the highly competitive intra-Asia region such as from China to Southeast Asia are already operating at below breakeven levels, Linerlytica warned in its latest weekly report.

Sam Chambers January 17, 2023 Splash247.com

Secondhand boxship prices are falling off a cliff. After a very muted second half of 2022 in terms of sales, the opening 17 days of 2023 have registered some severe drops in prices for the previously buoyant sector.

Brokers Southport Atlantic note the sale of the 2007-built, 2,553 teu G. Ace as a good illustration of the fall in values. The ship, just sold to Chinese interests, managed to obtain $13.7m, a sister ship, ST Ever, going for as much as $46.5m 12 months prior.

Similarly, the sector’s most aggressive buyer in recent years, Mediterranean Shipping Co (MSC), has just picked up a comparative bargain, paying $9.75m for the 21-year-old, 2,478 teu Buxcontact. A sister ship went for $23m 12 months ago.

“The candidate list continues to grow and pricing is under pressure. It will be interesting to note where new benchmarks land in the coming weeks,” the most recent container report from Braemar noted.

Boxship S&P volumes fell back last year from the record seen in 2021 with Clarksons Research tallying 0.6m teu sold in 2022 down from 1.6m teu. Secondhand prices fell notably in the second half as dropping markets and increased investor uncertainty took their toll with Clarksons’ secondhand boxship index falling 46% across the year.

“S&P price prospects are unlikely to improve anytime soon, due to the looming overcapacity triggered by the monumental orderbook,” a recent report from Alphaliner noted, suggesting today’s market could hold “interesting opportunities” for buyers that have so far been excluded from the market due to the prohibitive cost of tonnage.

in Freight News 20/01/2023

Pakistan could possibly witness fuel shortages in the near future as several oil importing companies face hurdles in securing dollars needed to close import deals, at a time when the South Asian country’s foreign exchange reserves have dwindled to the lowest level in almost nine years.

Sources told S&P Global Commodity Insights that the Oil Companies Advisory Council, members of refineries and oil marketing companies had written to the country’s finance ministry about oil importers facing challenges in opening letters of credit for the import of petroleum products. It could take up to six to eight weeks for import operations to normalize, sources added.

“If L/Cs are not established on a timely basis, critical imports of petroleum products will be impacted, which may lead to a fuel shortage in the country, further deteriorating the demand,” said Sumit Ritolia, a refinery economics analyst at S&P Global.

“The prolonged unavailability of import contracts and L/Cs will be sending negative signals to international oil suppliers, leading to high prices for imports and even it may lead to the forced cancellation of oil cargoes,” he said.

Energy-deficit Pakistan imports approximately 430,000 mt of motor gasoline, 200,000 mt diesel and 650,000 mt crude oil at a cost of $1.3 billion/month, according to the letter from the oil industry to the finance minister.

The banking hurdles already caused delays in the arrival schedule of multiple cargoes as well as led to the cancellation of a few cargoes, the letter said, adding that the situation has severely deteriorated during January.

“If L/Cs are not established on a timely basis critical imports of petroleum products would be impacted,” it said.

Hurdles mount

Attock Petroleum Ltd., the country’s second-largest retailer of petroleum products, as well as Pakistan Refinery and Hascol Petroleum, have written letters to the Oil Companies Advisory Council and the country’s central bank about some banks refusing to honor import documents.

“Local banks have unfortunately regretted to establish our oil import L/Cs on the plea that the State Bank of Pakistan has instructed to do rationing on their L/Cs establishment based on their foreign reserves situation,” said the letter from an oil marketing company.

Pakistan’s central bank reserves have dwindled to $4.3 billion, according to the State Bank. The reserves reached a low of nearly eight years and 11 months, enough to cover imports for only three and half weeks.

The dollar shot up to its strongest level against Pakistani rupee at 240.1 on July 29, 2022, and the exchange rate was last quoted at 228.2 Jan. 16, data from the State Bank of Pakistan showed.

“Reserves are down because of continuous principal and debt payments on foreign loans and drying up of external inflows from bilateral and multilateral sources,” said an analyst.

Pakistan’s ministry of energy and the Oil and Gas Regulatory Authority in a separate letter to the central bank said attention had been drawn toward insufficiency of credit lines and reluctance of banks to open L/Cs for oil imports due to various apprehensions.

They have requested the State Bank to urgently intervene and ask the banks to help open L/Cs for imports of fuels, including lubricants, to avert any risk of fuel shortages in the country, the letter added.

Pakistan’s potential domestic fuel supply crunch closely resembles Southeast Asia’s struggle to procure adequate supplies of middle distillate products during second-half 2022.

The dollar strengthened sharply against several Southeast Asian currencies, including Vietnamese dong and Indonesian rupiah in the fourth-quarter 2022. Many small-scale trading companies in the region struggled to finance dollars from local banks to conduct their import and distribution businesses, S&P Global Commodity Insights reported previously.

Slowing sales

Pakistan’s motor gasoline sales in December fell 11% year on year to 620,000 mt, diesel consumption decreased 15% to 520,000 mt and fuel oil fell by 3% to 120,000 mt, according to data from the Oil Companies Advisory Council.

In the six months ended Dec. 31, 2022, sales of motor gasoline declined 15% year on year to 3.83 million mt, compared with 4.51 million mt during the same period a year earlier. Diesel sales dropped 23% to 3.36 million mt and fuel oil fell 24% to 1.45 million mt, the data showed.
Tahir Abbas, head of research at brokerage Arif Habib, said the country was witnessing a slowdown in economic activity amid weak industrial output, leading to a decline in overall consumption. Higher petroleum products prices, a decline in automotive sales and lower demand from fuel oil-fired power plants had squeezed overall products sales, Abbas added.
Source: Platts

January 3, 2023 Container News

The pandemic-driven surge in demand for ocean imports catapulted global freight – and rates – to new levels of infamy in 2021 and 2022.

According to Freightos, logistics costs have played an important role in spiking inflation and they may play an equally important role in its easing as rates fall and operations normalise.

Transpacific ocean rates to the West Coast have stabilised at 2019 levels for about a month now, and prices to the East Coast are just 12% higher than in December 2019 as demand and congestion ease.

Additionally, Asia – Europe rates have fallen 50% in the last six weeks, but remain 30% higher than in 2019 as blanked sailings increase, and congestion and some recent labor disruptions may be slowing operations.

Carriers are expected to blank about half of all scheduled ex-Asia sailings for the months after the Lunar New Year, while some Asian manufacturers will take the unusual step of shutting down for the holiday as early as the second week of January in another indication of sagging demand.

Freightos reported that Asia-US West Coast prices dipped 3% to US$1,377/FEU. This rate is 91% lower than the same time last year. Asia-US East Coast prices also fell 10% to US$2,924/FEU, and are 82% lower than rates for this week last year, while Asia-North Europe prices increased 11% to US$2,405/FEU, and are 83% lower than rates for this week last year.

Judah Levine, head of research, noted that slowing volumes have led Asia – US West Coast rates to stabilise at 2019 levels for about a month now. Prices to the East Coast have continued to fall on easing demand and congestion – 10% since last week – and though the rate of the decline has slowed in December, the current price is just 12% above 2019 levels.

Moreover, Asia – North Europe rates have fallen 50% since mid-November. However, blank sailings, some persisting congestion and renewed labor disruptions in some ports may be combined to keep prices 30% higher than in December 2019.

Transatlantic prices of more than US$5,600/FEU remain almost three times higher than in 2019, despite the fact that they have declined 30% from their May-to-September US$8,000/FEU peak as carriers add capacity to this still-lucrative lane and congestion eases.

Furthermore, carriers are expected to blank about 50% of all scheduled sailings from Asia to the US and Europe after the Lunar New Year (LNY) holiday – which runs from late January to early February – suggesting they anticipate the slowdown to continue through the typical post-LNY lull months until inventories run down and demand picks up some time in the second quarter of the year at the earliest, or possibly not until next year’s peak season.

Another sign of sagging demand, according to Levine, is the unusual move among some Asian manufacturers to close for the holiday as early as the second week of January.

Easing covid restrictions in China is also contributing to more workers out sick, while other protocols will reduce barge and trucking capacity earlier in the month too, which may also be driving the earlier start to the holiday, according to Freightos analysis.

in World Economy News 04/01/2023

2022 was the year when the global economy was expected to recover from the mayhem unleashed by the COVID-19 pandemic. But then, Russia invaded Ukraine on February 24 and the economy was pushed into the throes of uncertainty.

The war in Ukraine and ensuing Western sanctions against Russia stoked geopolitical tensions, sent energy and food prices soaring to record levels and disrupted supply chains, throwing a wrench into the global recovery.

As inflation climbed to multiyear highs, central banks were forced to tighten the money taps at a frenetic pace by increasing interest rates in the face of an already slowing economy, further boosting the prospects of a recession in 2023.

A recession is, however, just one of the economic difficulties that awaits us this year. Here’s a look at some of the biggest challenges likely to confront the global economy.

An imminent recession
2023 is expected to be the third-worst year for global economic growth this century behind 2009, when the global financial crisis caused the Great Recession, and 2020 when COVID-19 lockdowns brought the global economy to a virtual standstill.

Analysts expect the world’s major economies, including the United States and the United Kingdom, as well as the eurozone, to slip into a recession this year as central banks continue raising interest rates to temper demand for consumer goods and services in an effort to rein in raging inflation.

The head of International Monetary Fund, Kristalina Georgieva, has warned that a third of the global economy could be hit by a recession in 2023, which she described as a “tougher” year than 2022.

The eurozone, in the midst of a severe energy crisis as it looks to shed its reliance on Russian fossil fuels, and the UK are likely to witness a deeper recession than their peers.

“The severity of the coming hit to global GDP depends principally on the trajectory of the war in Ukraine,” analysts from The Institute of International Finance wrote in a research note, adding that the conflict risked becoming a “forever war.”

The contraction in advanced economies and a stronger American dollar will hurt exports, spelling trouble for export-oriented Asian economies.

The consolation is that any recession will likely be short-lived and won’t be as severe as initially feared, causing only a modest rise in unemployment.

“Since inflation now seems to be receding all over the world, central banks should be able to take their feet off the brakes before long, allowing a recovery to begin late next year [2023],” analysts at Capital Economics said in December.

Stubborn inflation
Price rises will likely be moderate in 2023, helped by weakening demand, falling energy prices, easing of supply snarls and a decline in shipping costs. However, inflation will stay above central bank target levels, prompting further interest rate hikes. That means more pain for the economy, and it risks worsening a global debt crisis.

Inflation in the eurozone is expected to come down more slowly than in the US. In Germany, the eurozone’s economic engine, inflation is expected to fall thanks to measures like a cap on gas and power prices. But core inflation, which strips out volatile food and energy prices, could remain stubbornly high as a result of the government’s cash transfers to help households deal with higher living costs.

“The resilience of the [eurozone] economy, and particularly the labor market, suggests that inflation could be higher for longer than we expect,” said Andrew Kenningham, chief Europe economist at Capital Economics, adding that core inflation would fall more slowly as strong wage growth keeps inflation in the service sector high.

“There are several obvious risks to that forecast. ‘Known unknowns’ include what happens to energy markets, which in turn depends on the course of the Ukraine war and the weather, and how German manufacturers cope with high energy prices,” he said.

China’s COVID chaos
Just weeks before the start of 2023, China announced an exit from its controversial zero-COVID policy. The swift pivot has left the country’s health care system overwhelmed amid an alarming rise in COVID cases.

Going by the experience of other countries, the deluge of infections is expected to cause short-term disruption to the world’s second-largest economy. This could deal a blow to the fragile recovery in global supply chains. There is also the risk of a new coronavirus variant emerging and spreading to other parts of the world.

While the near-term prospects appear bleak, analysts expect the Chinese economy to end 2023 on a brighter note with a big boost resulting from Beijing’s ditching of zero-COVID and its support for the country’s ailing property sector, which accounts for nearly a quarter of China’s economic output.

“Chinese recovery, combined with the regional reopening, means Asia could have a good 2023,” Christian Nolting, Deutsche Bank’s chief investment officer, said in a note to clients. The recovery could “stabilize the economies of neighboring and many commodity exporting countries (such as those in Latin America) given that China is the dominant commodities consumer.”

An energy crisis
The precarious energy situation, especially in Europe, will continue giving headaches to governments in 2023. Europe might just manage to escape a complete energy crisis this winter thanks to milder-than-normal weather and consumers cutting their energy usage.

The lower demand for heating means the region’s storage facilities, which were filled to the brim last year, might remain well-stocked at the end of this winter. That’s likely to keep gas prices in check next spring, helping to pull down inflation.

The situation could still become challenging ahead of next winter. Having spent hundreds of billions of euros last year scouting for alternatives to Russian energy and shielding consumers, Europe might struggle to once again fill up its storage facilities. The competition for liquefied natural gas will be especially tough as China reopens and traditional Asian buyers like Japan and Korea start looking for more sources of energy.

Nolting said energy remains the main risk factor for the region, “coupled with a possible shortage of gas in winter 2023/2024.”

Geopolitical tensions, technology war
Military and political tensions will continue to remain among the biggest risks to the economy, much like in 2022. While there is no end in sight to Russia’s war in Ukraine, US-China frictions over Taiwan, the world’s top semiconductor manufacturer, and soaring tensions in the Korean Peninsula amid North Korea’s missile testing are likely to keep investors on their toes this year.

“Solutions to end Russia’s invasion of Ukraine remain elusive. This in turn means no solutions to the knock-on effects of this conflict on areas such as migration movements, global supplies of fossil energy commodities and food; and potential geopolitical shifts extending far beyond the region,” said Nolting.

The battle for technological supremacy between the US and China might get more intense in 2023. Last year, Washington banned the transfer of advanced US semiconductor technology to China.

“A trade conflict has now morphed into an effort to set the applicable long-term standards in highly important fields such as 5G, artificial intelligence and chips,” said Nolting. “Success will expand the country’s power base over the long term. So both sides will not want to yield ground easily.”
Source: DW