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  • 1

    OCEAN FREIGHT MARKET UPDATE

    DHL Global Forwarding, Freight

    February 2019

    Publication Date 30th January 2019

    PUBLIC

  • 2 2

    Contents

    TOPIC OF THE MONTH

    Top 12 carrier’s 2019 capacity expansion plans

    HIGH LEVEL DEVELOPMENT

    MARKET OUTLOOK

    Freight Rates and Volume Development

    ECONOMIC OUTLOOK & DEMAND DEVELOPMENT

    CAPACITY DEVELOPMENT

    CARRIERS

    REGULATIONS

    ? DID YOU KNOW?

    Top 15 container ports

    PUBLIC

    DHL Global Forwarding | OFR Market Update | Feb 2019

  • 3 3

    MSC has the largest newbuilding pipeline of all carriers this year, with some 20 orders,

    aggregating a total capacity of 334,550 TEU. The carrier’s orderbook includes 8 megamax

    units of 23,000 TEU, with 8 deliveries of such vessels expected for the 2nd half of the year. All of

    the megamax units are destined for the Asia-North Europe route, although no new string is

    expected to be launched this year, as the 2M partners (Maersk/MSC) have announced the

    extension of the rotation of six Asia-Europe strings that should take up some of these ships. The

    newbuildings are also expected to cover for some of the existing ships in MSC’s fleet that will go

    out of service for weeks or months for scrubber retrofitting in the 2nd half of this year. In addition to

    its substantial new ship pipeline, MSC is expected to launch a vessel jumboisation program

    this year.

    COSCO Shipping has the second largest vessel orderbook in 2019, with 12 units and a total

    capacity of 180,970 TEU. Most of the ships are expected to be delivered in the 1st half of the

    year. Notably, another 6 19,200 – 21,200 TEU units will complete COSCO Group’s current ‘megamax’ vessel program. The 6 new megamaxes are expected to

    join the OCEAN Alliance’s Far East – North Europe ‘NEU3/AEU7’ loop, replacing ships of 13,000 – 14,000 TEU.

    Evergreen has an orderbook of 10 ships in 2019, including 6 G-class 20,388 TEU units. The first 2 G-class megamax units will be assigned to the Asia – North

    Europe CEM service, which is currently being upgraded from the 13,800-14,000 TEU size to the 20’000 TEU scale. The remaining G-class units are expected to

    follow onto the same service later this year. Evergreen is also expected to launch a jumboisation program for some of its 8,500 units later this year.

    Hapag-Lloyd, ZIM and Wan Hai have no new ships due for delivery in 2019. All 3 carriers will have to rely on the charter market for any capacity expansion this

    year. This counts also for carrier HMM. It’s newbuilding program includes 12 ships of 23,000 TEU and 8 units of 15,000 TEU, but this will only be delivered in the

    2nd quarter of 2020 and 2021 respectively.

    Topic of the Month

    Top 12 carrier’s 2019 capacity expansion plans

    Source: Alphaliner

    DHL Global Forwarding | OFR Market Update | Feb 2019

    Top 12 Carriers : Scheduled Newbuilding Deliveries in 2019

  • 4 4

    High Level Market Development – Supply and Demand

    ECONOMIC OUTLOOK GDP GROWTH BY REGION1)

    PUBLIC

    1) real GDP, Global Insight, Copyright © IHS, Q4 2018 . All rights reserved. 2) Demand growth = Port-to-Port Container Traffic growth. Supply growth = Fleet Growth. Source: Drewry Maritime Research. 3) Drewry, in USD/40ft container, including BAF & THC both ends, 42 individual routes, excluding

    intra-Asia routes, 5.5% predicted freight rate increase. 4) Shanghai Shipping Exchange, in USD/20ft container & USD/40ft ctnr for US routes, 15 routes from Shanghai. 5) Bunker Index, in USD/metric ton, Bunker Index MGO (BIX MGO) = avg. Global Bunker Price for marine gasoil (MGO) port prices; (BIX

    380= avg. Global Bunker Price for all 380 centistoke (cSt) port prices; both index published on the Bunker Index website., Forecast based on HIS Market assumption of avg. USD70 per Brent barrel equaling Nov18 price. 6) DHL Global Trade Barometer Mar18, index value represents weighted average of

    current growth and upcoming two months of trade, a value at 50 is considered neutral, expanding above 50, and shrinking below 50.

    BUNKER PRICE INDEX5) WORLD CONTAINER INDEX (WCI)3) SHANGHAI CONTAINERIZED FREIGHT INDEX (SCFI)4)

    DHL TRADE BAROMETER6)

    Q1

    ’19

    3,000

    2,500

    2,000

    1,500

    1,000

    500

    0

    Q2 Q4 Q3 Q2 Q1

    ’18

    Q4 Q3 Q2 Q1

    ’17

    1,200

    1,100

    1,000

    900

    800

    700

    600

    500

    400

    Q1

    ’19

    Q4 Q3 Q2 Q1

    ’18

    Q4 Q3 Q2 Q1

    ’17

    Q2

    1,000

    800

    600

    400

    200

    0

    Q2 Q1

    ’19

    Q4 Q3 Q2 Q1

    18

    Q4 Q3 Q2 Q1

    17

    30

    35

    40

    45

    50

    55

    60

    65

    70

    75

    Q4 Q3 Q2 Q1

    ’17

    Q4 Q3 Q2 Q1

    ’16

    Q4 Q3 Q2 Q1

    ’18

    Global

    Ocean

    2018F 2019F 2020F 2021F 2022F CAGR

    (2019-22)

    EURO 2.1% 1.6% 1.5% 1.5% 1.7% 1.6%

    MEA 2.9% 3.1% 3.4% 3.3% 3.3% 3.3%

    AMER 2.6% 2.6% 2.1% 1.8% 1.8% 2.1%

    ASPA 4.9% 4.7% 4.5% 4.7% 4.7% 4.7%

    DGF World 3.3% 3.1% 2.9% 2.8% 2.9% 2.9%

    Forecast

    Actual

    Forecast

    Actual

    SUPPLY/DEMAND GROWTH (ANNUALIZED), IN % 2)

    Supply Growth %

    Demand Growth

    %

    0%

    1%

    2%

    3%

    4%

    5%

    6%

    7%

    2016 2017 2018F 2019F 2020F 2021F 2022F

    SUPPLY/DEMAND GROWTH (ANNUALIZED), IN % 2)

    BIX 380

    BIX MGO

    DHL Global Forwarding | OFR Market Update | Feb 2019

  • 5 5

    Market Outlook February 2019 – Major Trades

    Carriers have announced an extensive blank sailing program in anticipation of the weaker demand during Chinese New Year

    KEY Strong

    Increase ++

    Moderate

    Increase +

    No

    Change =

    Moderate

    Decline -

    Strong

    Decline - -

    EXPORT REGION IMPORT REGION CAPACITY RATE

    EURO AMNO = +

    AMLA = =/-

    ASPA + =/-

    MENAT + =/-

    SSA = =

    AMNO AMLA = +

    ASPA = =

    EURO = =

    MENAT = =

    SSA = +

    EXPORT REGION IMPORT REGION CAPACITY RATE

    AMLA AMNO = ++

    ASPA + +

    EURO = ++

    MENAT = +

    SSA -- ++

    ASPA ASPA - =

    AMNO - -

    AMLA = -

    EURO -- =

    MENAT - =

    OCEANIA -- (AU)

    - (NZ) = (AU)

    + (NZ)

    DHL Global Forwarding | OFR Market Update | Feb 2019

    Source: DGF

    PUBLIC

  • 6 6

    Market Outlook February 2019 – Ocean Freight Rates Major Trades Market outlook on smaller trades available in the back-up

    O C E A N F R E I G H T R A T E S O U T L O O K

    ASPA – EURO overall space situation is getting tight before the Chinese New Year holiday. An extensive blank sailing program is in place from all

    alliances as a reaction to the low demand and will start from wk5 onwards.

    EURO – ASPA & MEA Ocean rates remain stable resp. slightly decreasing for certain commodities and short term agreements due to the space and bunker

    development.

    ASPA – AMLA Space continue to be tight to Mexico & WCSA, while ESCA is manageable. Space issues expected post Chinese New Year to

    Mexico/WCSA and ECSA due to multiple blank sailings from all carriers.

    ASPA – AMNO No major rush prior Chinese New Year. Extensive blank sailings are expected between wk6 to wk8 (particularly into USEC).

    EURO – AMNO Ocean rates are strong and still increasing; inland carriages in US remain problematic; congestion on USEC & CAEC causes severe

    delays into USMW area

    ASPA – MENAT As predicted, space is getting tight before Chinese New Year period. Carriers are also restricting low paying cargo onboard. Most of the

    FAK rates have been extended till mid February.

    ASPA – ASPA Blank sailings have been planned during the Chinese New Year period. No significant changes to the FAK rates expected.

    AMNO – EURO No change with rates & Capacity in February. Space remains tight out of Houston.

    DHL Global Forwarding | OFR Market Update | Feb 2019

    Source: DGF

    PUBLIC

  • 7 7

    Economic Outlook & Demand Development

    Danger of global economic downturn has risen, probability of a recession in 2019 still low

    Source: IHS Markit Global Executive Summary, IHS Purchasing Manager Index Manufacturing, a PMI at 50 is considered neutral, expanding above 50, and business shrinking below 50.

    DHL Global Forwarding | OFR Market Update | Feb 2019

    PUBLIC

    EURO Fiscal stimulus coming in DE, FR & IT will lead to a temporary pickup in real GDP in Q1 ’19. UK parliament’s rejection of the Withdrawal

    Agreement support cautious near-t

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