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Up-to-date port information
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Port of Saint Petersburg
FY 2016 Container volumes
1.7M TEU +1.8% Y/Y
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Port of Barcelona
FY 2016 Container volumes
2.2M TEU
+14.5% Y/Y
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SeaIntel Maritime Analysis
www.SeaIntel.com
Weekly
Indicators
30 Jan-5 Feb 2017
SeaIntel Sunday Spotlight February 5, 2017 – Issue 298
Windows User
Content
Editorial: Getting ready for the alliances Page 2
Carriers benefitting from Panama Canal Page 3
Carrier On-time Performance in 2016 Page 6
January 2017 IMF world outlook update Page 12
Carrier Service Changes Page 17
Carrier Rate Announcements Page 18
SeaIntel products Page 20
Executive Summary
Carriers benefitting from Panama Canal
Following an initial decline, the spread in Pacific freight rates between USWC
and USEC has been steadily increasing, with carriers now fully benefitting from
the savings from the expanded Panama Canal.
Carrier On-time Performance in 2016
Global schedule reliability rose Y/Y by 4.5 percentage points to 82.8% with all
carriers improving their on-time performances. Wan Hai was the most reliable
carrier in 2016.
January 2017 IMF world outlook update
IMF projections for advanced economies have been upgraded, but US
protectionist policies bring uncertainty to the economic forecast.
Port of Algeciras
FY 2016 Container volumes
4.8M TEU +5.4% Y/Y
Port of Klaipeda
FY 2016 Container volumes
443,312 TEU +12.9% Y/Y
SeaIntel Maritime Analysis – creating value from information
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Editorial: Getting ready for the alliances
The upcoming alliances have not yet released their named vessel schedules for the
new alliance networks, so we cannot yet say anything on the capacity being offered by
the individual alliances, and what the competitive position will be in the individual
trade lanes. We also do not yet know the scope or actual deployment plans of the
extended Vessel Sharing Agreement between the 2M alliance and HMM, and “The
Alliance” has still not released their final service rotations, and many ports are still left
as left as placeholders, not least the choice of hubs in South East Asia and East
Mediterranean, and their intended ports of call in the West Coast of North America.
Hopefully, the carriers will publish these details in the coming weeks, not least if they
would like this year’s Transpacific contract negotiations not to become a miasma of
Fear, Uncertainty and Doubt. Carriers have rarely been stellar in their communications
efforts, and these things need to be clear: what services will you offer, what ports will
you call, and what vessels will you deploy? The clock is ticking.
Next, carriers will likely want to show a strong level of confidence in their new alliance
networks, and nothing will erode such confidence than a collapse of freight rates
leading up to the new alliance launch in April. So while the carriers will be looking with
anticipation to their new networks, the outgoing alliances still need to keep a keen eye
on the Supply/Demand balance in individual trade lanes.
The carriers have shown a strong resolve over the 2017 Chinese New Year, cutting a
record breaking 290,000 TEU from Asia-Europe, while the 205,000 TEU of blanked
capacity on Transpacific was twice what we saw in 2016. This resolve needs to be
extended into March if the carriers wish for a strong start to the contracting season.
The March 1st Transpacific General Rate Increase (GRI) is currently only supported by
a handful of carriers (see page 18), and there is currently no steam for an Asia-
Europe GRI. The March GRI may become pivotal in the coming negotiations, and a
strong showing of carrier support, and possibly blanking of a few vessels at the end of
February may be required. But before that, please publish the new schedules.
SeaIntel Maritime Analysis – creating value from information
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Carriers benefitting from Panama Canal
Following an initial decline, the spread in Pacific freight rates
between USWC and USEC has been steadily increasing, with
carriers now fully benefitting from the savings from the expanded
Panama Canal.
On June 26th 2016 the new set of locks
in the Panama Canal were officially
opened, and a new era for not only the
canal, but also shipping lines and cargo
owners was initiated.
We have previously analysed how this
has led to a battle between the Suez
Canal and Panama Canal for the routing
of Asia-USEC services, as well as also
seen how it has resulted in a significant
re-deployment through the Panama
Canal where the former Panamax
vessels have been rapidly replaced by 8-
10.000 TEU vessels.
Due to the longer sailing distances and -
historically – the smaller vessels, the US
East Coast all-water route naturally
carries a price premium compared to the
route straight into the US West Coast.
However, following the upsizing of
vessels through Panama, it is clear that
the unit costs for the carriers through
this route have declined. Additionally,
the shift of some services back from
Suez to Panama have also to some
degree shortened the sailing distances,
added further impact on the unit costs
for the carriers.
The question we are exploring this week
is whether this saving in unit costs is
principally benefitting the carriers or the
shippers.
As we wish to analyse the effect of the
Panama Canal on freight rates, the
actual freight rate level in itself makes a
poor object for study. This is because
the actual freight rate is not only
influenced by the opening of the
Panama Canal, but also by the overall
freight rate developments in the
Transpacific markets due to
supply/demand developments, as well
as possible fights for market share
amongst the container lines.
However, there is one measurement
which can isolate the effect of the
Panama Canal on freight rates, and that
is the price premium the US East Coast
cargo commands versus the US West
Coast cargo. This difference is calculated
on the basis of the SCFI spot rates
published by the Shanghai Shipping
Exchange.
SeaIntel Maritime Analysis – creating value from information
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In this case both trades are subjected to
American import developments, and any
sudden changes in the premium will in
the main be due to a Panama Canal
effect.
The premium can be measured either as
a straight value in USD/FFE based on
the SCFI spot rate index, or it can be
measured as a percentage on top of the
lower US West Coast rate. Figure 1
shows the development in the rate
premium measured in USD/TEU and
figure 2 shows the relative difference in
per cent.
The development is showing an
interesting pattern. We see a sharp
decline in premium at the time of the
expansion – a decline that is extremely
visible in the relative measure shown in
figure 2. That seems to indicate that
there was a quick shift in the market
towards the shippers getting the benefit
of the lower unit costs associated with
the new deployments.
However, this effect can be seen to have
been reversed in the 6 months following
the expansion. The reversal appears
very sharp in figure 1, but in this
context it should be kept in mind that
the oil price has been increasing in this
period, and consequently the price
difference in absolute terms will also be
increasing to compensate for this effect.
On the relative scale shown in figure 2,
we see that following an initial stable
period where the premium declined to
40%, this has now shifted to a premium
around 60%.
SeaIntel Maritime Analysis – creating value from information
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In figure 3 we look at the USEC price
premium in a more extended historical
context. We do see that the premium
tends to have fluctuated significantly
over time. The spike seen in 2015 was
particularly driven by the labour
disputes on the US West Coast resulting
in significant cargo volumes being
shifted to the east.
It is clear to see that the rapid decline in
premium following the expansion led to
the lowest premium on record in 3rd
quarter 2016. But it is equally clear to
see that the recent months’ of increases
had resulted in a situation where the
current premium for shipping to the
USEC is broadly in line with the long-
term historical average.
This in turn can chiefly be interpreted as
a development wherein the carriers
initially gave away the savings to the
shippers, but have gradually managed
to re-acquire the savings for
themselves.
For carriers that have been through
an extremely tough year in 2016 in
terms of financial performance, the
re-acquisition of the Panama Canal-
based savings must come as a
welcome relief.
SeaIntel Maritime Analysis – creating value from information
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Carrier On-time Performance in 2016
Global schedule reliability rose Y/Y by 4.5 percentage points to
82.8% with all carriers improving their on-time performances.
Wan Hai was the most reliable carrier in 2016.
This week, SeaIntel published the
January 2017 edition of the Global Liner
Performance (GLP) report, based on
more than 12,500 vessel arrivals
registered in December 2016. The
release of the January GLP report makes
it possible to conduct an analysis of the
development in on-time performance for
the entire year of 2016 and compare it
with the developments we have recorded
in 2014 and 2015.
2016 has been a memorable year due to
various incidents which shook the
container industry. The demise of Hanjin
undoubtedly brought some turbulence
into the industry as some global carriers
were forced to reshape their service
networks and adjust to market needs.
The merger of CSCL into COSCO
impacted the number of global players in
the industry and, Going forward we will
see increased consolidation, with APL
having been acquired by CMA CGM,
UASC acquired by Hapag-Lloyd,
Hamburg Süd acquired by Maersk line,
and the three Japanese liners – MOL,
NYK, and K Line – merging from 2018.
Carriers also faced challenges in finding
the right balance between supply and
demand, as overcapacity heavily affected
spot rates in various trade lanes and
carriers’ P&L sheets turned red.
However, it is worth noting that despite
various incidents in the container
industry, 2016 was the best year for
schedule reliability since SeaIntel started
measuring in 2011, especially over the
summer months, when the average
global on-time performance score
jumped to its highest historical level of
85.9% in June 2016.
In this issue of the SeaIntel Sunday
Spotlight we dig into the yearly
developments in global on-time
performance for the Top18 carriers and
compare their on-time performance on
the main East/West trade lanes.
Methodology
The data for this analysis stems from
SeaIntel’s industry-leading Global Liner
Performance (GLP) database. Each
month, SeaIntel records the schedule
reliability across an average of 12,500
vessel arrivals in more than 300 ports
SeaIntel Maritime Analysis – creating value from information
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around the world on 34 deep-sea trade
lanes. The Global Liner Performance
report covers all the Top18 carriers,
along with more than 80 niche carriers
which we have decided to exclude from
this analysis. The GLP database currently
contains more than 690,000 individual
global vessel arrivals.
The carriers’ schedule data reflects
proforma schedules 15-45 days into the
future, and ”on time” has been defined
as actual vessel arrival within plus or
minus one calendar day of the proforma
schedule.
It is worth mentioning that the individual
carrier performance is dependent on the
performance of the services carriers offer
to their customers, irrespective if they
are services the carriers operate
themselves, through slot-charters or a
Vessel Sharing Agreement (VSA), or
through a carrier alliance. That means
that carriers are benchmarked from a
shipper’s perspective across all the
services they offer to their customers,
rather than merely on the services and
vessels they operate themselves. We
have defined this measurement as
“commercial performance” versus the
more carrier-focused “operational
performance”.
For the sake of brevity, we decided to
include six main east-west trade lanes in
this analysis. We will focus on Asia to
North Europe, Asia to Mediterranean,
Asia to USWC, Asia to USEC,
Transatlantic EB and Transatlantic WB.
Additionally, the on-time performance for
each trade lane is based on the following
figures for vessels arrivals per year:
- Asia to Mediterranean: > 4,600
- Asia to North Europe: > 4,100
- Asia to USWC: > 3,800
- Asia to USEC: > 3,900
- Transatlantic EB: > 6,900
- Transatlantic WB: > 5,600
Global Performance
Throughout 2016 most deep see trade
lanes experienced an improvement in
their schedule reliability scores, which
was reflected in the global score. The
global reliability figure remained above
83.0% in the period from April 2016 to
November 2016, recording a new all-
time high of 85.9% in June.
While the schedule reliability numbers by
themselves do not provide any
perspective of causality, it does seem
likely that the improvements in on-time
performance are to some extent driven
by the lower bunker oil prices, as the
costs to catch up on delays were less
SeaIntel Maritime Analysis – creating value from information
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severe than in the years with higher oil
costs.
Figure B1 illustrates the development of
annual schedule reliability over the last
five years. Overall, schedule reliability
experienced an increase of 4.5
percentage points from 78.3% registered
in 2015 to 82.8% in 2016, and 10.2
percentage points above the level of
2014. It is important to take away that
while schedule reliability certainly has
improve in both 2015 and 2016, this is
to some degree a reflection of just how
poor reliability was in 2014, as 2016 is
just a few percentage points above what
we saw in 2012 and 2013.
Figure B2 provides a closer look at the
developments in quarterly global
schedule reliability in the period from
2011-Q3 to 2016-Q4. It is evident that
2015-Q1 was the quarter with the lowest
on-time performance, 69.6%. This was
primarily fuelled by the labour dispute in
the US West Coast ports, and the
resultant massive congestion and delays
of up to several weeks.
During the following three quarters
schedule reliability jumped by an
incredible 15.2 percentage points, hitting
84.8% in 2015-Q4 and remaining in the
range from 78.0% to 85.2% throughout
the following four quarters of 2016.
Top18 Carriers’ Performance
The Top18 carriers’ annual on-time
performance for 2014-2016 is depicted
in figure B3. Based on the positive trends
in global reliability, it is hardly surprising
that all Top18 carriers experienced an
improvement in their on-time
performances. The greatest Y/Y increase
of 8.5 percentage points was recorded by
MSC, followed by Wan Hai, ZIM and
UASC with 6.5, 5.6 and 5.4 percentage
points, respectively.
In 2016 Wan Hai achieved the greatest
level of schedule reliability, scoring
88.0% even though the carrier had been
SeaIntel Maritime Analysis – creating value from information
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ranked fifth in 2015. The top performing
carrier was followed by Hamburg Süd at
86.6%, ZIM at 84.9% and MOL at
84.8%.
Table B3 clearly shows how 2016 took a
major deviation on a carrier level, as the
traditional best performing carrier,
Maersk Line, dropped four spots to the
fifth place, having been on the top of the
on-time performance tables in every
year in 2012-2015. Table B3 shows that
the Maersk Line did in fact not see on-
time performance deteriorate, but rather
remained relatively stable at 83.0-
84.5%, while the four carriers that
outperformed them in 2016 saw their
schedule reliability improve considerably
in 2016. The long-term “second-placer”,
Hamburg Süd, also came second in
2016, but his time to Wan Hai. That
being said, looking over the entire period
of 2012-2016, Maersk Line and Hamburg
Süd outperforms the other carriers
considerably 85.8% and 84.7%,
respectively, with Wan Hai coming in
third at 81.4%.
The gap between the best and the
poorest performing carriers decreased
from 7.2 percentage points in 2015 to
5.9 percentage points in 2016, which
indicates that the closer cooperation
between carriers, either through
alliances, VSAs or slot charter
agreements, also leads to less diversity
in the on-time performance.
However, when we looked at
development on a monthly level, we
could see that the difference between
the best and the poorest performing
carriers narrowed from 20.5 percentage
points in April 2015 to approximately 5
percentage points in April 2016, yet it
was still above 11 percentage points for
the last two months in 2016. It will be
interesting to see how the new alliances
and increased consolidation will impact
the diversity in schedule reliability, and
whether we will see any individual
alliance aiming to offer substantially
SeaIntel Maritime Analysis – creating value from information
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better schedule reliability than
competition.
Trade Lane Performance
The schedule reliability performance on
the main East/West trades lanes in 2014,
2015 and 2016 is presented in figure B5.
It is evident that all main trade lanes
experienced an increase in schedule
reliability, except for Asia-Mediterranean
and Asia-North Europe, which took a
slight dip and declined Y/Y by 0.4 and
7.8 percentage points to 83.3% and
79.4% in 2016, yet still outperforming
the levels of 2014 by 13.5 and 12.3
percentage points respectively. Despite a
slight decrease in reliability in Asia-
Mediterranean, the trade lane score was
still the highest compared to other major
East/West trades.
Compared to 2015, the most significant
improvement in schedule reliability was
recorded in the Asia-US West Coast
trade, up 18.9 percentage points to
81.0%. The second greatest increase of
15.8 percentage points was recorded in
Transatlantic Westbound, scoring 78.1%.
According to figure B5, schedule
reliability reached 80.0% in the Asia-US
East Coast trade lane in 2016. That was
the lowest Y/Y increase of 4.1
percentage points, yet it still showed a
significant rise of 17.4 percentage points
compared to 62.6% seen in 2014.
Finally, we look into schedule reliability
development on a quarterly level in the
period from 2012-Q1 to 2016-Q4. The
results are shown in figure B6.
Overall, looking into figure B6 we can
see that from 2012-Q1 up to 2016-Q4
the differences in schedule reliability
scores across the major East/West
SeaIntel Maritime Analysis – creating value from information
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trades were wide and fluctuated
continuously. This was not the case in
the last three quarters, when the trades
seemed to follow similar trends even
though they cover very different
geographical regions.
2016 was an important year in terms of
schedule reliability. Four major
East/West trades reached the highest
historical levels ever seen in 2016-Q3:
Asia-Us East Coast (87.1%), Asia-US
West Coast (89.5%), Transatlantic
Eastbound (86.6%) and Transatlantic
Westbound (86.0%).
Looking at historical developments, we
could see that Asia-US West Coast
experienced the major decline in
schedule reliability, dropping to an
abysmal level of just 16.8% in 2015-Q1
due to labour disputes in the US West
Coast ports, when many shippers
experienced significant cargo delays. The
Transatlantic Westbound trade lane hit
bottom at 41.1% in the beginning of
2015, followed by the second lowest
score of 44.0% in 2014-Q1.
Conclusion
In 2016 shippers experienced improving
schedule reliability in the major
East/West trade lanes, except for Asia-
North Europe and Asia-Mediterranean,
which saw their reliability scores slip by
7.8 and 0.4 percentage points to 79.4%
and 83.3% respectively.
At this point it is difficult to forecast the
direction of schedule reliability in 2017,
as the shipping industry will go through
several major changes which may impact
carriers’ on-time performances. It is
worth noting that new shipping alliances
will come into effect in April 2017 and
that could cause some confusion until
the service networks and vessel
schedules are fully aligned.
In 2016 all global shipping lines raised
their reliability scores compared to the
previous year. The title of most reliable
carrier went to Wan Hai with a score of
88.0%, recording a Y/Y increase of 6.5
percentage points. The second most
reliable carrier was Hamburg Süd with
86.6%.
It is clear that there are many variables
which impact schedule reliability in
general, yet we should bear in mind that
increasing cooperation between carriers
resulted in narrowing of the top18
carriers’ individual performances in
2016, and with the new alliances ad
greater liner consolidation may lead to
even less diversity in carrier schedule
reliability in the coming years.
SeaIntel Maritime Analysis – creating value from information
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January 2017 IMF world outlook update IMF projections for advanced economies have been upgraded, but
US protectionist policies bring uncertainty to the economic
forecast.
On January 16 the International
Monetary Fund (IMF) published their
update of the October 2016 World
Economic Outlook (WEO) report. In
October, advanced economies had been
downgraded compared to the previous
outlook in April 2016, with the US
economy showing weaker-than-
expected output in the first half of 2016.
Nevertheless, positive news for the
shipping industry were derived from the
expected slow recovery of the Russian
and Brazilian economies in 2017, as well
as the projected growth of China and
India.
Recent political developments have
placed an additional layer of uncertainty
over the shipping industry. US President
Donald Trump’s highly protectionist
policies brought serious concerns
throughout the shipping industry. The
withdrawal of the United States from the
Trans-Pacific Partnership (TTP) has
created uncertainty about the outlook
for the transpacific trade, as new
agreements will have to be discussed.
Moreover, the travel ban imposed by the
US President which suspends entry to
the US of citizens from seven
predominantly Muslim countries – Iran,
Iraq, Libya, Somalia, Sudan, Syria and
Yemen – could affect the shipping
industry. As reported in an article from
Lloyd’s List, it could have an impact on
crew changes at US ports, if vessels are
boarding crew members who are
nationals of any of the seven banned
countries.
In this week’s Sunday Spotlight, we take
a closer look at the main conclusions of
the latest IMF update, focusing on
trends affecting the container shipping
industry. Readers with a keen interest in
the underlying arguments and
conclusions can find the original report
and January update on the IMF website.
Methodology
It should be noted that these are
financial reports, meaning that global
trade growth is measured in monetary
terms rather than container volumes,
weights or quantities which would have
been more relevant for the container
shipping industry. Furthermore, both
services and goods are included in the
trade statistics, so the link to the
container trade is clearly not one-to-
one. However, a significant drop or rise
SeaIntel Maritime Analysis – creating value from information
13
in world trade measured in monetary
terms will also manifest itself in terms of
actual volumes to be transported.
The IMF’s update is based on certain
assumptions and if they are not met the
economic outlook will be affected, with a
consequent impact on our projections
for the container shipping industry.
One of the first assumptions is the
policy changes that may be introduced
by the new US administration and the
spill-over impact this may have on the
global economy. As the report was
published few days prior to the
inauguration of Donald Trump as US
President, we may see a radical update
of the economic outlook in April.
Furthermore, the IMF bases its forecast
on the recent agreement among OPEC
members and other oil producing
countries to limit supply in order to raise
oil prices. The rise in oil prices - the IMF
predicts an increase of 19.9% in 2017 -
will naturally lead to an increase in
bunker oil prices as well. This in turn will
raise the cost levels for carriers,
although carriers’ revenues should
increase through higher BAF surcharges.
Nevertheless, as we have extensively
argued in issues 267, 269 and 284 of
the Sunday Spotlight, the natural BAF
time delay will lead to a significant cash
drain for carriers when bunker oil prices
rise.
Lastly, it is important to highlight that
the IMF pinpoints some risks to the
global growth outlook. The risk of
increased restrictions on global trades
and migration as a result of more
protectionist policies “would hurt
productivity and incomes”, says the IMF.
This is especially relevant for the
container shipping industry, as global
container trade growth hinges on the
free flow of goods among countries, so
highly protectionist policies are a threat
to the recovery of the industry.
Global economic developments
The IMF left their global growth estimate
for 2016 unchanged compared to the
October report, at 3.1%. As discussed in
the update, this growth rate was mainly
due to stronger-than-expected growth in
advanced economies, especially given
the reduction in inventory levels.
Looking at the estimate for 2016 across
the advanced economies, it was
influenced by a strong recovery of the
United States economy in the second
half of the year, after a weak beginning
to 2016. In the Euro area, Spain and UK
showed a stronger-than-predicted
economic growth in 2016. On the other
hand, the estimate for the emerging
SeaIntel Maritime Analysis – creating value from information
14
market and developing economies has
shown a much different development.
Higher-than-expected growth was
experienced in China and Russia, but
weaker economic activity in countries
such as Argentina, Brazil and Turkey
affects the growth estimate for 2016.
Table C1 – Global Economic Outlook
2016 2017 2018
World Output
3.1% 3.4% 3.6%
AE 1.6% 1.9% 2.0% EMDE 4.1% 4.5% 4.8%
AE = Advanced economies. EMDE =
Emerging market and developing economies
The projections for global growth have
been left unchanged from the October
report at 3.4% in 2017 and 3.6% in
2018. This is definitely good news for
the container shipping industry as the
IMF expects economy activity in both
advanced and developing economies to
accelerate in the next two years.
The outlook for the advanced economies
been upgraded: they are now projected
to grow by 1.9% in 2017 and 2.0% in
2018. As the IMF puts it, “(..) the
forecast is particular uncertain in light of
the potential changes in the policy
stance of the United States under the
incoming administration”. Hence, a
scenario of stronger economy activity
and consequent potentially stronger
trade development is possible, though
with a slight concern on the impact that
the Trump administration’s potentially
protectionist policies might have. There
was positive news for the Asia-Europe
trade lane in a projection of increased
growth for Germany, Japan, Spain and
the UK, given a stronger-than-expected
activity at the end of 2016. Nonetheless,
growth rate forecasts were revised
downward for Italy and South Korea.
As the IMF discuss in their update, the
global growth forecast is mainly driven
by improvement in the EMDE
economies. The outlook for EMDE
economies is for growth of 4.5% in 2017
and 4.8% in 2018.
Table C2 – World trade volume
projections
2016 2017 2018
World 1.9% 3.8% 4.1%
AE 2.0% 3.6% 3.8%
EMDE 1.9% 4.0% 4.7%
Table C2 lists the IMF projections for
world trade volume in 2017 and 2018 as
well as the estimates for 2016.
The world trade outlook has been left
unchanged for 2017 compared to the
October report, and global trade growth
of 3.8% is still expected. On the other
hand, growth of 4.1% is now expected
in 2018, which corresponds to 0.1
percentage points lower than October.
SeaIntel Maritime Analysis – creating value from information
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Trade volumes for the Advanced
Economies have been downgraded by
0.1 and 0.3 percentage points for 2017
and 2018 respectively. That means that
the IMF now expects them to grow by
3.6% in 2017 and 3.8% in 2018.
For the emerging markets, on the other
hand, there is an opposite development
with trade volume projections for 2017
and 2018 being upgraded by 0.1 and
0.4 percentage points, respectively. The
IMF now expects these trade volumes to
grow by 4.0% in 2017 and 4.7% in
2018. It should be noted that the IMF
includes both services and goods in
international trade figures.
Nevertheless, a growth or decrease in
trade volume could translate into impact
for the container shipping industry, as it
could lead to lower or higher flows of
physical goods. The high projections for
emerging economies are definitely
positive news for the industry, as trades
to/from countries such as Brazil or India
would highly benefit from such growth.
Updates on individual countries
Table C3 shows IMF projections for the
main global economies.
As previously stated, the economic
outlook for the advanced economies was
upgraded by 0.1 and 0.2 percentage
points compared to the October WEO,
mainly driven by stronger-than-
expected economy activity at the end of
2016 in the US, Spain, UK and Japan.
Despite the high degree of uncertainty
about the future policies of President
Trump’s administration, the IMF has
revised its forecast upwards by 0.1 and
0.4 percentage points for 2017 and
2018, and is now forecasting growth
rates of 2.3% and 2.5% respectively for
the two years.
Table C3 – Economic projections for
major economies (%)
2016 2017 2018
US 1.6% 2.3% 2.5%
Germany 1.7% 1.5% 1.5%
Spain 3.2% 2.3% 2.1%
UK 2.0% 1.5% 1.4%
China 6.7% 6.5% 6.0%
Italy 0.9% 0.7% 0.8%
India 6.6% 7.2% 7.7%
Russia -0.6% 1.1% 1.2%
Brazil -3.5% 0.2% 1.5%
In the Euro area, Italy was downgraded
by 0.2 and 0.3 percentage points for
2017 and 2018 compared to the October
WEO. The Italian economy is now
expected to grow by 0.7% and 0.8% in
2017 and 2018, respectively. On the
other hand, the Spanish forecast has
been upgraded from the October WEO
by 0.1% percentage points for 2017 and
0.2 percentage points for 2018, which
should counterbalance the negative
development of the Italian economy for
SeaIntel Maritime Analysis – creating value from information
16
the trades in and out of the
Mediterranean.
There may be positive news for the
Asia-Europe trade lane in the outlook for
the northern European economies.
Projections for Germany and UK have
been positively revised for 2017 given
their stronger-than-expected economic
activity at the end of 2016. The IMF
expects Russia to recover further and
grow by 1.1% in 2017 and 1.2% in
2018, partly driven by higher oil prices.
Looking at emerging and developing
economies, China and India are once
again the economies growing at the
fastest pace, which is extremely
interesting for the container shipping
industry development. The IMF expects
the Chinese economy to grow by 6.5%
in 2017, 0.3 percentage point above its
October WEO.
The IMF has downgraded its the forecast
for the Indian economy by 0.4
percentage points for 2017: it now
expects the country to grow by 7.2%.
The revision was mainly due to
temporary negative consumption. The
projection for the Indian economy to
grow by 7.7% in 2018 is remained
unchanged from the October WEO.
Lastly, the IMF update has negative
news for trades touching the East Coast
of South America. The Brazilian
economy has been downgraded by 0.3
percentage points for 2017 compared to
the October report, and is now expected
to grow by only 0.2%. The IMF expects
the Brazilian economy to pick up later in
2018 and grow by 1.5%.
Conclusion
The IMF update of the WEO report
shows that the global economy is
expected to keep growing throughout
2017 and 2018. This is mainly due to
the stronger-than-expected economy
activities in some advanced economies,
as well as stronger 2017 growth forecast
for China. Concerns have been posed by
the IMF especially on the impact that
the new administration in the US will
have on the global trades, as
protectionist policies are on the agenda
of President Trump.
On the positive side for the Asia-Europe
trade is the upgrade for the economic
growth forecasts in Germany, UK and
Spain. Moreover, the Russian economy
is expected to slowly recover in 2017
and 2018, which should have a positive
impact on the trade into both North
Europe and the Black Sea.
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17
Carrier Service Changes CMA CGM to leave WAX 2 service
CMA CGM has announced that they will
stop offering the WAX 2 service from the
beginning of March 2017. The service is
operated by Maersk Line/Safmarine,
deploying 10 vessels with vessel capacity
ranging from 4,500 TEU to 5,400 TEU.
After CMA CGM’s departure the service
will still be operated by Maersk Line
(FEW5) and Safmarine (FW5). According
to CMA CGM schedules, the last vessel
“Christa Schulte” departed from Yantian
on 26th January.
The port rotation of WAX2/FEW5/FW5
service is as follows (10 port calls):
Yantian – Hong Kong – Nansha –
Singapore – Tanjung Pelepas – Walvis
Bay – Apapa – Tema – Cotonou –
Tanjung Pelepas and back to Yantian.
With CMA CGM’s departure from WAX2
service, the carrier will revise the port
rotation of three other African services –
WAX, WAX3 and AFEX. In the overview
below, we have underlined the port calls
that were added, while the ports calls
with a strikethrough have been removed.
As the carrier did not update their
schedules, we could not determine when
the first sailings will take place on the
revised port rotations. All three services
listed below each have 12 vessels
deployed with an average vessel size
from 4,350 to 4,500 TEU.
The port rotation of the WAX service will
be as follows (14 port calls):
Shanghai – Ningbo – Chiwan – Nansha –
Tanjung Pelepas – Singapore – Cape
Town – Walvis Bay – Cotonou –
Tincan/Lagos – Apapa – Abidjan –
Douala – Abidjan – Pointe Noire –
Colombo – Singapore – Shanghai.
The revised port rotation of WAX3 will
look as follows (12 port calls):
Xiamen – Shanghai – Ningbo – Nansha –
Singapore – Tanjung Pelepas – Cape
Town – Apapa – Tin Can/Lagos – Onne –
Apapa – Tanjung Pelepas – Xiamen
The vessels deployed on AFEX service
will call the following ports (11 port
calls):
Shanghai – Ningbo – Fuzhou – Nansha –
Singapore – Tanjung Pelepas – Lome –
Tema – Abidjan - Cotonou – Walvis Bay
– Tanjung Pelepas – Shanghai.
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20
SeaIntel Reports & Products
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Tradelane Capacity Outlook Report
In-depth weekly report, providing detailed overview of actual capacity offered in the main trade
lanes for the coming 12 weeks. The outlook is based on the detailed sailing schedules combined
with information of service changes and blanking of sailings. You can pro-actively identify weeks
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- 19 Trade lanes covered
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Port-to-Port Schedule Reliability
Detailed fact sheets providing schedule reliability information at a carrier/service level for your
chosen port-port pair. The fact sheet includes:
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Fact Sheet price: 100 Euro. 10 Sheets: 900 Euro. Monthly subscriptions and larger
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Order at: [email protected]
Mystery Shopper
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sure, that the experience is what you intend it to be? If not, SeaIntel Maritime Analysis can provide
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Tailor-Made Analysis
Our core belief is that anything in this industry can be analysed – and analysed well. However,
the solution to a particularly difficult problem often rests in the ability to think out of the box and
develop new analytical viewpoints. Doing this is our key strength.
At SeaIntel Maritime Analysis we have a combination of extensive practical industry experience,
combined with strong academic analytical skills. We have served a wide range of customers
looking to gain insights into the container shipping industry including:
- Container carriers
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Contact [email protected] to discuss how we may assist you with tailor-made analysis.
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Analysts:
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Shipping Analyst, Mr Odvidijus Voronkovas – [email protected]
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