Annual Container Market Review and Forecast 2006/07

June 4, 2007 - PRLog -- Now in its seventh year, the Annual Container Market Review and Forecast is firmly established as the liner industry’s leading report and forecasting tool for both global and individual trade lane supply, demand and pricing analysis.

World Container trade growth to 2011
Structure of the containership fleet
Global supply/demand balance to 2011
Freight and charter rates
Carriers’ strategies and financial performances
The impact of utilising 40ft high cube containers
Cascading vessels from the East/West trades

Product Description

Key research includes:

World container handling activity Composition of world container trade East/West and North/South routes’ analysis Global and route-by-route supply/demand forecasts Freight rate developments Container fleet development The containership charter, S&P and newbuilds markets Carriers’ operating strategies and profitability Positive and negative factors that will affect supply and demand

Current trading characteristics:

Container growth in the secondary East/West markets, driven by emerging Europe, as well as some North/South and regional trades Freight rates continuing on a downward slide, despite strong headhaul East/West demand A weaker charter market, reflecting a more negative supply/demand balance Orderbook has reduced as a percentage of the overall fleet, deliveries exceed new orders New super post-Panamax tonnage appearing in East/West trades Ocean carrier profitability in rapid decline with freight rates also falling

Pricing matters:

Container traffic volumes (both globally and for the main routes); vessel fleet capacity; freight rates; charter rates, S&P and newbuild prices; carriers’ operating and financial performances

Costs go north, rates go south

This latest annual container market report is the liner industry’s leading review and forecasting tool for both global and major trade lane supply, demand and pricing analysis.

Despite strong demand in the East/West headhaul trades, ocean freight rates are in decline and costs continue to increase.

During the first half of 2006, stronger than expected double-digit growth in the headhaul transpacific and Far East/Europe trades has soaked up some capacity.

As the market settles after tremendous M&A activity in 2005, ocean carriers will be looking to consolidate their market shares, and minimise cost exposure in a climate characterised by declining rate levels.

Main findings

The Annual Container Market Review and Forecast 2006/07 will provide those involved in the liner shipping industry with detailed analysis and interpretation of trends and issues together with historic development and five-year projections on supply, demand and pricing matters.

Supply/demand balance weakens

As super post-Panamax tonnage continues to be deployed in the main arterial trades at a fast rate, demand growth will be unable to keep pace. For the moment, ocean carriers have managed to prevent too much tonnage from being cascaded into the North/South routes, but it will be a primary concern not to destabilise the secondary East/West trades, where demand growth remains strong.

Research findings

World container trade is still growing - but the decline in strength of annualised throughput growth at the main Chinese ports is an indicator that the boom times of 2003/2004 are behind us. Some of the eastern European countries such as Russia and the Ukraine are driving new trade flows away from traditional markets. Vessel orders have declined, but there has been a recent surge in ocean carrier orders for vessels in the 8,000 teu+ category, for delivery in 2009/10. With declining profitability, carriers may be going into the charter-back market to release funds tied up in newbuilds. The fact that more vessels are being re-let on the charter market indicates a weakening of global demand and a general tightening of belts.

What will happen to rates?

The report highlights the fact that rates are in decline, but not by as much as was feared at the beginning of the year. Industry-wide freight rate levels could fall by about 6.3% in 2006 and rate erosion should be significantly less in 2007/08 since much of the present decline has been triggered by competitive activity rather than vacant ship slots. Market sentiment has played a big role in rate contract negotiations with shippers this year, guided by the perception that capacity would wildly overshoot demand growth. In reality, demand in some key trades was much stronger than expected and this shows that the normal supply/demand rules have not applied this year. The completion of recent M&A activity has also fuelled the fight for carrier market shares.

Invaluable aid to long term planning

The Annual Container Market Review and Forecast 2006/07 is the seventh in an annual series, published every September - optimal timing for all those involved in the budgeting and planning processes for the forthcoming year. In addition to the regular supply, demand and pricing analyses, the latest edition includes analysis of the impact of higher bunker costs, the increased utilisation of 40ft high cube equipment and how cascading tonnage from the core East/West trades has affected secondary routes.

The Annual Container Market Review and Forecast 2006/07 is available from early October, in hard copy and pdf format. The report is also the Th


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