Empty cargo ships hit record high
Unused cargo space equivalent to 8.8% of world's capacity
Robin Chan, Straits Times 20 Feb 09;
THE number of empty container ships worldwide has climbed to a record high, according to a new report.
A total of 392 vessels are currently sitting idly in ports, up from 210 at the beginning of last month.
The unused cargo space is equivalent to about 1.1 million standard units (TEU) of empty containers, or 8.8 per cent of the total world capacity.
This figure surpasses the previous high of 5 per cent set in 1986, the year United States Lines went bankrupt.
The report from Lloyd's List in Britain said demand would have to grow at an average of 15 per cent over the next three years 'just to restore equilibrium' by early 2013.
A 10 per cent figure, however, was more realistic, pushing recovery to 2014.
Hobbled by a combination of an oversupply of ships and a dwindling demand for goods, the shipping industry is facing one of its most challenging times.
Shipping lines have responded by sharply cutting capacity to reduce costs and push freight rates back up.
APL, a unit of Neptune Orient Lines (NOL), said yesterday it would raise its rates on the Asia-Europe route by US$250 (S$382) per container from April1. That followed similar moves by other shipping lines,
Mr Detlev Kerber, APL's vice-president for the Asia-Europe trade, said: 'Freight rates in this trade have been falling drastically for more than a year...In many cases, not even variable transportation costs are covered by current freight rates.
'Our intention is to restore freight rates in the Asia-Europe trade to a sustainable level.'
Shipping giant AP Moller-Maersk laid up eight ships in December and issued a profit warning ahead of its results announcement next month.
NOL, meanwhile, has acted to cut US$200 million in costs by laying up 15 ships and chartering another six, a response in part to its fourth-quarter net loss of US$149 million.
NOL chief executive Ron Widdows said the year would be challenging, and 2010 would likely be weak as well. He anticipates that the company will report losses this year.
World trade has taken a beating as the United States and Europe battle major recessions.
The important Asia-Europe trade route has virtually collapsed, and the world's major ports are seeing traffic slow dramatically.
Container traffic through Singapore ports shrank 19.6 per cent in January, following a 14 per cent decline in December, as Singapore's exports tumbled a record 35 per cent last month.
Similarly, container traffic through Hong Kong's port slumped 23 per cent last month.
The World Bank has predicted that world trade will shrink 2.1per cent this year - the first decline since 1982.
Container volume here continues to fall
Transhipment at the port of Singapore plunges 19.6% to 1.97m TEUs
Vincent Lee, Business Times 17 Feb 09;
THE trend that started in the last quarter of 2008 kicked in fully in January as transhipment at the port of Singapore plunged 19.6 per cent to 1.97 million twenty foot-equivalent units (TEUs) from 2.46 million TEUs a year ago.
Container throughput at the dominant operator PSA's Singapore terminals fell 19.6 per cent to 1.92 million TEUs from 2.38 million previously.
Jurong Port, meanwhile, handled 18.3 per cent fewer boxes - 58,000 TEUs compared to 71,000 TEUs previously.
Transhipment volumes have been sliding since they hit a high of 2.73 million TEUs in July. By December, throughput had fallen 21 per cent to 2.16 million TEUs in a clear sign that global trade was rapidly decelerating.
Neptune Orient Lines warned in the third quarter that it would slip into the red for Q4. At its recent Q4 results announcement, it not only revealed the expected loss (US$149 million net) but went on to warn of a full-year loss for 2009 as well.
Sector-wise, the outlook isn't much better. Some 303 container ships with a combined capacity of 800,000 TEUs were laid up on Feb 2, according to container industry database AXS Alphaliner.
This amounts to 6.5 per cent of the global fleet and is the highest proportion of idled ships on record.
In an interesting twist, however, total bunker sales rose to 3.02 million tonnes in January from 2.73 million tonnes in December as a recovery in dry bulk rates saw a revival of some shipping activity.