Warning to ocean carriers: don't use canal crisis to 'price-gouge customers'
Ocean carriers have been warned not to take advantage of the capacity crunch resulting from ...
Container shipping lines are making better margins than ever, according to new research, which suggests that while customers face escalating freight rates, carrier operating costs have been declining.
The Container Shipping Market Quarterly Review, published by UK consultant MDS Transmodal in conjunction with the Global Shippers Forum (GSF), is a new container market monitor which assesses the state of the market by eight indicators: trade volumes; shipping capacity; capacity utilisation; carrier costs and revenues; market competitiveness; port connectivity; service performance; and CO2 emissions.
It found that the three indicators presenting the greatest challenges to shippers and forwarders currently are the sharp increases in trade volumes in the third quarter, the even sharper increases in freight rates and declining service levels as a result of widespread port congestion.
“Global trade levels recovered strongly in Q3, but remained below 2019 levels for the quarter, overall. Container shipping demand is weaker than a year ago,” it said.
“Unit operating costs continued to decline in Q3, due to lower fuel prices and higher utilisation of capacity. Unit revenues rose sharply from better capacity utilisation and increased volumes. Rate increases appear not to be driven by increases in unit operating costs,” it added.
“Service predictability for shippers declined at many ports as vessels resumed intermediate calls at congested ports, delaying service arrivals and departures beyond their expected times.”
While many of these issues have been experienced first-hand by shippers and forwarders booking cargo on deepsea trades, there are early indications for shippers, keen to report on the environmental performance of their supply chains, that CO2 emissions per container on the Asia-North Europe trade are on the decline.
According to the report, the average amount of CO2 emitted per teu on the route has declined by about 20% since the beginning of 2016.
“Emissions reduced as the twin policies of slower vessel speeds and the introduction of larger vessels took effect. The decreases were most marked on Far East- North Europe route, where these policies had greatest impact.
“A package of measures, targeting ship design and vessel operation was agreed by IMO in November and could be adopted in June 2021 for implementation from 2023. The impact of these measures on the emissions per unit of cargo will determine how soon shippers can report reductions emissions attributable to the movement of cargo,” the review states.