|
| |
|
|
| |
The pressure on freight rates in the container liner-shipping sector has been causing some
concern in the market recently. The concern is compounded by the anticipated increase in
capacity from the new deliveries ordered when the market surged at phenomenal rate two years ago.
The year 2005 probably was the best ever for the liner trade leading to phenomenal increase
in the freight rates, charter hire rates and ship prices. The buoyancy of the market led to
a wave of new orders being placed by over-confident owners and operators, which are beginning
their deliveries in 2006-2007.
While it is a measure of satisfaction to many that there has not been a slow down in the demand
for container shipping space, it is worrying to all that the emergence of surplus capacity generated
largely by the arrival of the mega-sized containerships would create serious overhang in the market.
It is forecast that the fleet of ships of above 4,000 TEUs is set to grow by 20 per cent over the next
two years as against 9 per cent for ships below 4,000 TEUs over the same period. The most dramatic
will be for the mega-size carrier above 7,500 TEUs, which is set to increase from 86 this year to 232
units over the next two years.
Various capacity management and enhancement approaches are being initiated and implemented by carriers
seeking to cope with the surplus capacity and also to ensure fuller utilization level for the mega-sized
carriers. Such a development invariably involves restructuring or re-constituting over-lapping service
strings, or migrating to other services to achieve higher yields. In the major east-west trade, Northport
at Port Klang is among the ports that have been affected by such a move by shipping lines seeking to
improve their fortunes.
Up to the third quarter of this year we handled a total of 4,530 ships above 7,000 TEUs but although the
total volume of the trade at the port remained largely unchanged, some of the lines reduced certain service
strings in the Asia-Europe trade.
As a broad-based port with extensive ship connectivity, we at Northport are better prepared for such
unavoidable changes in industry trends. While we have recorded reduction in service calls on certain
major trade, it is comforting that we recorded a sharp increase in several new services, including
expansion of others in the north-south and related trades.
Our concern will be the end of the peak season after September/October when the market will bear
the full impact of the delivery of the newbuildings while at the same time demand is expected to
soften. The rates could drop further prompting further rationalization measures by carriers, or
carrier groupings to prevent a collapse of the market.
Shipping being a highly cyclical, such rise and fall are inevitable features of the market. However,
the silver lining in the outlook is the positive prognosis of the growth of the global trade that is
expected to maintain a rate of about 4 per cent for the whole year. Barring further rises in oil prices
impacting on the trade growth, the outlook for growth in the trade in 2007 also remains positive.
Thank you.
|
|
|
|
 |
 |
|
| 
