New alliances, structural change and positive economic trends have transformed the container shipping market over the past year, driving growth and pushing business performance figures from deep red into black, according to Xeneta.

Xeneta, a leading global benchmarking and market intelligence platform for containerised ocean freight, says a recovery of the container segment is well under way.

However, despite long-term rates that are, in some cases, up 120 per cent year on year, the future remains uncertain due to a looming shadow on the horizon.

From a 2016 that saw the collapse of Hanjin and the top 20 market players posting combined net losses of $5 billion (Wall Street Journal), 2017 is shaping up to be a bumper year, said Xeneta’s CEO Patrik Berglund.

Berglund said: “Maersk’s recent 2017 Q2 financial report provides an interesting snapshot of the industry.”

“Higher freight rates propelled revenues upwards by 8.4 per cent to almost $10 billion for the quarter. Meanwhile, reports suggest that Hapag-Lloyd will triple its earnings this year,” he said.

“Rates have jumped since their historical lows last year. For the Chinese main port to Northern Europe route last May, the three-month rolling average for long-term rates for a 40-foot container stood at $655,” he added.

Berglund continued: “This May it was $1438, an increase of 120 per cent, and the same average is now up at $1618. Meanwhile we see US containerised ports are busier than ever, handling a projected 1.75 million TEU this month (Global Port Tracker) alone, the most on record.”

“This comes despite the uncertainty caused by President Trump’s ‘America First’ doctrine and his withdrawal from initiatives like the Trans-Pacific Partnership. US container imports actually seem to be growing,” he added.

Xeneta CEO pointed out that strong consumer demand, the restructuring of industry alliances – 90 per cent of all container ship traffic is now accounted for by three major alliances (The Alliance, Ocean and 2M) – and Hanjin’s demise all help push up utilization and rates, Berglund says, but there remains uncertainty.

“We remain optimistic with regards to the remainder of 2017, but the longer term becomes more complex,” he argues, pointing to one ‘huge’ issue – the increase in mega-ship capacity,” he said.

Berglund  commented: “A staggering 78 new mega-ships are due to come online for the Asia-Europe trades over the next two years, pushing capacity up by over 23 per cent.”

Berglund said that all stakeholders in the container shipping supply chain need to pay close attention to the market to stay ahead of developments and get the best rates for their assets, services and cargoes.

Xeneta gathers global shipping data from a community of over 700 leading businesses, covering more than 160,000 port-to-port pairings and over 35 million contracted rates, it stated. – TradeArabia News Service