Global ocean is a major traffic artery of our planet. Container shipping is the most common, convenient and relatively cheap form of shipping. 60% of all sea cargo and 90% of cargoes transported in the original packing are container shipping.
In 2015, there have been many events in the economy and politics, which had an impact on container shipping. The weakening economic growth of China and other regions of the planet caused a reduction in the number of import-export operations. Container carriers expect difficult times.
According to the Fitch international rating agency the forecast for the market of container cargo shipping in the regions of the East – Africa, Europe – the Middle East is a steady negative trend. According to the experts in 2016 the market of container transportation will be reduced, light unstable growth is possible in some regions.
What are the reasons for the reduction of cargo turnover? Reduction of cargo turnover is caused by a complex of simultaneous problems.
They include: 1. Persistent oversupply from transport companies. 2. Attempts to offer dumping prices. 3. Increased volatility of rates. 4. Reduction of international trade volumes. 5. A sharp drop in the growth rate of the global gross product. 6. In 2015, the growth was only 2.3%, a very low index. 7. In 2016 according to the forecast of the International Monetary Fund, the world trade growth will not exceed 4.1%. 8. The decline in Chinese imports will lead to a drop in turnover of container transportation in the regions of the East – Africa, Europe – the Middle East.
Previously, China has provided 40% of container turnover.
What can container carriers expect? Negative trends can cause a severe blow to the transport companies, specializing in container transportation. The volume reduction may lead to the bankruptcy of small operators, pushing them to the need to consolidate efforts to survive in the economic crisis conditions. Large companies will either be faced with the difficulties, but they will feel less pressure. In 2016 the increase by 3-5% in demand for container transshipment services is projected, but against the backdrop of oversupply, this index will not be able to turn the tide in the direction of profitable growth.
Как поведут себя фрахтовые ставки? The Fitch analysts predict a stabilization of freight rates at a low level. There are no preconditions for their growth. The decline in fuel prices will reduce the cost of bunkering and transshipment. The experts do not recommend the companies to reduce dramatically the cost of transshipment, the tactics is not profitable for the long term.
What positions are occupied by the leaders of the container traffic market? The Fitch analysts bring the operators of the container traffic market..
The state of the container traffic market may be influenced by a merger of Chinese companies CSCL and COSCO, which control respectively 3.5 and 4.3% of the market. Together, they will take the fourth place after the giants: Maersk, MSC and CMA CGM. The container traffic market outlook in Ukraine In Ukraine, the container terminals are equipped in the ports of Odessa, Yuzhnoe, Ilichevsk, Kherson, Mariupol, Oktiabrsk. In 2015, the volume of container cargo transportation in Ukraine decreased in connection with closing of the routes to the Crimea, falling hryvnia and a sharp decline in consumer demand for imported goods due to the fall in purchasing power.
Ukraine, as a rule, exports goods with a low added value, therefore, the payment of logistics accounts for a large part of the cost of transportation. To lower the export price of transportation it is desirable to provide Ukraine with the volume of goods in containers comparable to with the volumes of imported goods.
The exports of agricultural products from Ukraine is growing, including edible oils in flexitanks. Flexitank is a disposable elastic capacity (volume of 10-24 million liters) made of polymer materials to be used for transportation of liquid cargoes inside of 20-foot shipping containers.
Loads from Ukraine in flexitanks are shipped to many countries such as:
Ukraine transports in the containers forest, ore and steel products, grain products group. For example, flour to Africa and the Middle East, husk and bran to the Far East region.
The fall of the hryvnia exchange rate contributes to a decrease in the level of the container freight, so the bulk shipping of grain prevails over the container.
What measures can help the survival of the industry? Increasing the capacity of containerships to the maximum load capacity is the main hope for the industry. Maersk Company is a pioneer in the implementation of this strategy. In 2016, the company is launching on the market a mega container vessel with a capacity of more than 18 000 TEU and is not the only project of the company.
The total container capacity will grow, outpacing the demand. Despite the crisis in 2015, the growth of container fleet capacity in the world amounted to 9%, in 2016 the same index is expected. In connection with the increase in prices for freight forwarding support and transportation in whole, the income of the majority of large companies have not decreased in terms of money, but at the same time the number of handled containers reduced in certain areas.
The crisis cannot last forever. With the growth of economic relations in the world, the container shipping market will revive.