Analysis of Hard Container Shipping Data

2nd hand container ships order has continued to decline due to the fact that most traders prefer more tonnage being delivered by the suppliers instead of contracting individual transporters. Research studies show that global order has been declining significantly over the last 63 months. In 2012, small and medium yards experienced significant reduction in delivery schedules as a result of this change in the market. It is estimated that by 2014, most of the yards that enjoyed booming business over the last few decades will be forced to close down as a result of decline.

On the other hand, the container market is currently working so hard to handle the rampant increase in capacity due to the sluggish growth. Studies shows that most liners have managed to handle the surplus but the tonnage service providers have been forced to bear the burden arising from over capacity. For example, back in 2012, the European import volumes significantly reduced. In fact, it fell below pre-crisis level. This led to a huge overhang capacity despite the fact that box rates remain relatively high. The time charter rates were forced by the circumstances to come up with new ways of covering the operating costs to remain relevant and still make profits.

Crude tankers freight rates did improve significantly in 2012 when compared with the low levels in 2011. It’s documented that delivery from crude tank vessels managed to hit high levels in 2012. In fact 25 million dwt were added to the fleet and only 10 million dwt ended up being sent to the scrap yards by the end of 2012. Further analysis shows that the distance adjustment led to growth of approximately 6% this year. In the same year, Baltic LPG Index was recorded to have increased by 1%. The most plausible reason for this change is due to increase in cargoes been transported from Asian and Middle East markets. Unfortunately, during the last quarter of the year, this data dropped due to a reduction in demand for product during winter season.

As a result, ship companies are facing low freight rates, short to medium term outlook, declining assets and the risks of over capacity cannot be overlooked.