Disclaimer

The articles excerpted on this site report on the state of the industry as seen by mainstream media, and do not necessarily reflect the opinion of the officers of the ILWU Coast Longshore Division.

Another big box ship order raises over capacity worries

From Marine Log:

Analysts are worried that the container shipping industry is about to build itself a whole new lot of overcapacity.

South Korea’s Daewoo Shipbuilding & Marine Engineering Co. said in a regulatory filing today that it has clinched a 927 billion won (US$818 million) deal to build five container vessels for delivery by […]

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Maersk slumps to only its second annual loss in seven decades

Excerpts from the Financial Times:

Shares in Maersk fell as much as 7 per cent on Wednesday as it reported only its second annual loss in seven decades and halved its dividend to try to protect its investment grade credit rating.

Maersk recorded a net loss of $1.9bn for 2016, compared with analysts’ expectations of […]

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Container shipping costs skyrocket after Hanjin collapse

From Hellenic Shipping News:

Container shipping costs, which radically plunged, now shows signs of recovery after the fall of Hanjin Shpiping Co. The strategy of Maersk Line, the world’s largest shipping group which cuts down shipping fees until its competitors fall down and pick fruit when they are liquidated, seems to be working. As […]

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US shippers resisting major trans-Pacific contract rate hikes

From the Journal of Commerce:

Backed against a wall of deep losses and weak demand but emboldened by a doubling of spot rates since mid-2016, container lines are warning trans-Pacific shippers of significantly higher spot and contract rates next year. Shippers, however, aren’t convinced the fundamental drivers around pricing have changed, setting the stage for […]

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South Korea’s Hanjin Shipping becomes symbol of industry in trouble

Excerpts from Bloomberg:

Hanjin assist

Hanjin Shipping Co. is hardly a bellwether in the world of container movers. As lenders halt all support this week, the South Korean company is now emerging as a symbol of the slump that has plagued the industry since the global financial crisis.

Creditors led by Korea Development Bank will […]

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Port of Portland’s container service hits zero

Excerpts from the Lewiston Tribune:

Westwood Shipping [made] its last call on the Port of Portland Saturday. It was the only container carrier that stopped regularly at the Oregon port and carried a fraction of the volume major shippers hauled. The last of those, Hapag-Lloyd, departed a year ago.

Low rates and overcapacity in the […]

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Analysis: Is shipping in double dip danger?

Drewry Maritime Research asks: will carriers repeat the same tactics that saved them in 2009, or will they wait until things reach boiling point, as the risk of a double dip recession rears its head?

Today’s market does share some similarities to the 2009 crisis: carrier staff redundancies, ultra-low freight rates and the rapid increase […]

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Container shipping on the cusp of a major shakeup

Plagued by overcapacity and ongoing losses, the container shipping industry is rife with talk of potential mergers and acquisitions. The consolidation of the highly fragmented industry is long overdue, especially when contrasted with such other heavily capitalized transportation sectors as railroads and airlines.

The possibility that a new wave of M&A may be imminent was […]

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Megaships, overcapacity causing ‘race to the bottom’ for rates

”The most dramatic symbol of these problems is that an 18,000 container Triple-E freighter, one of the largest (and therefore theoretically most cost-efficient) container ships on the planet, was idled by Maersk in late October.” — Fortune

From an article titled ”Maersk’s terrible earnings report shows ocean shippers are sinking themselves” in Fortune Magazine:

[…]

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Maersk issues profit warning on weaker shipping market

Danish conglomerate A.P. Møller-Maersk A/S on Friday cut its full-year profit guidance, saying global demand for container shipping — the conglomerate’s biggest contributor — has been weaker than expected.

The company said it expected underlying earnings to come in at $3.4 billion this year, compared with its previous guidance of $4 billion, based on a […]

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Cosco to order 11 container megaships, adding to ship overcapacity

Excerpts from the Wall Street Journal:

The Wall Street Journal reported the impending Cosco order in April. At the time, some senior company executives had reservations about following bigger competitors—including Maersk Line, a unit of Denmark’s A.P. Møller-Maersk A/S, Switzerland-based Mediterranean Shipping Co. and France’s CMA CGM SA—that already operate dozens of such behemoths.

Container […]

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Shippers question multiple surcharges levied by Asia-Europe lines

Excerpts from the Journal of Commerce:

One major global shipper compared the container shipping freight market to a car dealership. “The basic product is not profitable, but if you can sign the customer up for a sufficient number of additionals, you’ll survive,” he told JOC.com.

[S]urcharges contained, among other items, terminal handling fees at both […]

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Asia-Europe to take hit as Cosco places mega ship order

Cosco has reportedly ordered nine 20,000-teu ships, with an option for four additional vessels of the same size, according to several news media.

The ultra-large container ship newbuilding order comes just days after Maersk Line ordered 11 similarly-sized vessels of 19,630-teu each. That order came after CMA CGM confirmed it had ordered six 14,000-teu ships, […]

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Costly bet on big cargo ships comes up short

From today’s Wall Street Journal:

The world’s biggest container-shipping operators are making an expensive bet by committing billions of dollars in giant vessel orders. So far, that bet is a losing one as freight rates hover around record lows and demand for ocean shipping is weak.

The already big operators are looking to grow and […]

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Container shipping demand to grow, rates to be on slight decline: Maersk

Container shipping demand is projected to grow 3-5% this year over 2014, but freight rates are expected to be on a slight decline, according to Lars Mikael Jensen, chief executive of Asia Pacific region at Maersk Line.

On the supply side, growth is anticipated at 5-7%, putting demand and supply growth close to the same […]

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