in International Shipping News 22/04/2023

“Change is afoot in China,” according to Wood Mackenzie principal economist for the Asia Pacific region, Yanting Zhou. With economic growth slowing, rising political tensions between China and the US, and global supply chain restructuring, ‘disruption’ is batting at China’s external markets.

“The new government has much to do to accelerate the recovery of the Chinese economy,” Zhou said. As it shuns US trade and investment in favour of neighbouring Asian economies, China must boost its domestic consumption.

In a research note, Wood Mackenzie analysed strategies and policies for the new government as it deals with four major changes in the Chinese economy.

The first change refers to the new government and new policies. At the March 2023 National People’s Congress, Xi Jinping was re-elected president and Li Qiang became China’s new premier. “Although the top leader is unchanged and the long-term strategy of ‘dual circulation’ persists, we expect there to be changes to the government’s short- to medium-term policies to support the recovery of the Chinese economy,” Zhou said.

Second is the reopening of the economy. The government has set a “lower-than-expected” gross domestic product growth target of 5% for 2023. “While we think this target is somewhat conservative, it could also mean that China will face more challenges in recovery and that government support will be below expectations.”

Wood Mackenzie forecasts GDP growth of 5.5% this year, although it concedes that if China really pushes to make up ground lost during the pandemic, 7% growth is “not impossible”. It anticipates GDP growth of 5.1% in 2024.

China’s ‘zero-Covid’ policy hit its economy hard. GDP dropped to 3% in 2022, which affected energy demand with oil consumption and LNG imports dropping. On the flipside, low-cost domestic coal production increased.

External changes

The third change is the shifting external markets. Wood Mackenzie notes that China’s exports are expected to decline in 2023, in line with the global economic slowdown. Data on exports from the first two months of the year confirmed the downward trend: they fell 6.8% compared with the same period in 2022. Also, the souring US-China relationship will come into play, while the wider global supply chain is seeking to diversify from China for cost, security and political reasons.

Wood Mackenzie notes that China has reacted by redirecting trade and investment to the Belt and Road countries. “The country has been promoting the Regional Comprehensive Economic Partnership (RCEP), which came into effect on January 1, 2022,” Zhou said. “China has also been reducing import tariffs in line with RCEP requirements and its eight free trade agreements with countries across Latin America, Asia and Europe.”

Wood Mackenzie notes that the Peterson Institute for International Economics calculated that China’s import tariffs for the rest of world had dropped from 8% in early 2018 to 6.5% by the end of 2022, while taxes for the US had increased from 8% to 21.2%.

However, the analyst notes that beyond the short term, China’s competitiveness will be challenged. “Its cost advantage, especially for middle- and low-end products, is already eroding,” Zhou said. “Consequently, growing domestic demand has become more important ‒ and China has ground to recoup. At the end of 2022, the economy was 3% below where we expected it to be based on its pre-Covid trajectory.”

The final change is the shift from quantity-driven growth to quality-driven growth highlighted by Premier Li. This hopes to address demographic changes, where China’s population fell for the first time in 2022, alongside a slowdown in urbanisation. “To achieve this, however, the government needs a new set of policy tools to support consumption,” Zhou said. “A systematic consumption revival plan is needed.”

While the government has made boosting domestic consumption a priority, specific measures have been thin on the ground. Wood Mackenzie reports that some local governments are providing consumption incentives, for example on auto purchases and coupons for home appliances. However, these are criticised as measures that “merely bring forward future demand and rarely create additional demand”.

“The real challenge for the new government is to raise the population’s willingness to consume and reduce China’s ultra-high saving rates by providing more security to Chinese households,” Zhou said.

Impact on commodities

In its Horizons: The Great Reopening report, Wood Mackenzie examined what the end of China’s ‘zero-Covid’ strategy means for global energy and natural resources. It described the analysed scenarios as “bullish for all commodities”, where finely balanced markets for oil, LNG and coal are leveraged to a super-charge a Chinese bounce.

In the analyst’s China high-growth scenario, increased construction activity would result in China’s oil demand growing by 1.4 million barrels per day (bpd) on the year – about 400,000 bpd higher than its base case. “This additional China demand in a year with very strong global growth tightens the market further,” the report said. Chinese demand for diesel/gas oil and petrochemical feedstocks is also stronger in its high-growth scenario, offset by lower exports of gasoline, jet and diesel/gasoil.

While Chinese LNG imports fell by 16 million tonnes or 20% in 2022, gas demand is now rebounding. “We expect more than 30 billion cubic metres (bcm) (9%) of demand growth, supported by stronger GDP growth and lower prices. However, booming domestic production (up 14 bcm) and continued growth in Russian pipeline imports (up 7 bcm) will constrain LNG imports to 71 Mt (97 bcm) in 2023.” This is 7.4 million tonnes (10 bcm) more than in 2022 and well below the 80 million tonnes imported in 2021.

Meanwhile, Wood Mackenzie predicts a “potential record-breaking year” for global coal demand in 2023. “Our base case sees significant growth in China’s coal demand in 2023: 85 million tonnes (4%) in the power sector and 17 million tonnes (1%) in the non-power sector,” it said. However, with domestic supply expected to increase by 85 million tonnes, the analyst expects only 17 million tonnes of import increases this year. That said, in its high growth scenario, China sets a record for global coal demand, exceeding 2019 demand of 8,512 million tonnes. Most would be sourced domestically, but China would still need an additional 49 million tonnes of seaborne coal, including 40 million tonnes of thermal under that scenario.
Source: Baltic Exchange

06 Apr 2023 By Caixin Global

Two of China’s largest container truck yards near the major port city of Ningbo in Zhejiang province have been filled with nearly 3,000 idle vehicles with no cargo to haul since early March, and the situation could get even worse with the delivery of new vessels. Could overcapacity in the industry lead to a price war?

This file photo taken on 3 January 2023 shows shipping containers stacked at Nanjing port, Jiangsu province, China. (AFP)

(By Caixin journalists Li Rongqian, Qi Zhanning and Kelsey Cheng)

Since early March, two of China’s largest container truck yards near the major port city of Ningbo in Zhejiang province have been filled with nearly 3,000 idle vehicles with no cargo to haul.

Traffic at the Hengpu and Beilun parking lots, which primarily serve the port, has dropped dramatically over the last two years, several truck drivers told Caixin. During the shipping boom in 2021, some drivers would make 27 cargo deliveries per month on average, they said. Now, they’re happy if they can do two a week.

The change only becomes more apparent in the port, where there are so many idle cargo containers that workers have nearly run out of places to stack them. “This area is almost full now, and many of the empty containers are being moved out,” one terminal operator told Caixin.

A combination of factors has led to these mountains of metal boxes piling up at Chinese ports — the low cost of storing containers in China, a surge in their supply during the pandemic export boom, and the immense number of them returning home once the boom faded, Yu Jianhua, head of the General Administration of Customs, said at a 21 March press briefing.

The container pile-up in China is one of the more visible symptoms of the problems in the shipping industry caused by a downshift in foreign trade amid weakened consumer demand and slowing global growth. The situation could get even worse with the delivery of new vessels, leaving analysts concerned that the overcapacity in the industry could lead to a price war that will weigh heavily on the bottom line of some freight carriers.

For China, the problem is with its exports, whose growth began slowing in mid-2021 due to shrinking demand from its major trade partners and the recovery of supply chains elsewhere that has met some of the demand for goods.

Demand sinks

In Shanghai, more 40-foot containers have come into the port than have departed each week since the beginning of the year, according to monitoring platform Container xChange.

Container xChange’s Container Availability Index (CAx) has remained elevated at more than 0.6 compared with readings over the last three years in ports across China, including those in Ningbo and Tianjin, according to a report the platform put out in early February. A reading over 0.5 means that more containers have entered a port than departed over a given period.

Globally, about 6% of container capacity is idle, with a large number of ships filled with empty containers sitting anchored at sea, a person working at a large freight forwarder previously told Caixin in February.

For China, the problem is with its exports, whose growth began slowing in mid-2021 due to shrinking demand from its major trade partners and the recovery of supply chains elsewhere that has met some of the demand for goods.

In the first two months of this year, China’s goods exports fell 6.8% in dollar terms from the same period of 2022, customs data show. While that figure beat estimates and narrowed from December’s 9.9% year-on-year decline, it’s far from a sign that a trade recovery is around the corner.

Exports to the US slid 21.8% year-on-year and those to the EU fell 12.2%. In the US, high inflation cut into household purchasing power, while packed warehouses have forced retailers to cancel orders. In Europe, rocketing energy prices have spurred inflation that has discouraged consumers from opening their wallets.

The slowdown in demand has led to a collapse of ocean freight rates, which are primarily determined by changes in ship utilisation, according to Sea-Intelligence, a research firm. The China Containerized Freight Index, which tracks spot and contractual freight rates leaving major Chinese container ports on 12 shipping routes, began falling in August. The index, released by the Shanghai Shipping Exchange, declined 8.5% month-on-month in February following a steeper 11.2% drop in January.

As of 30 March, the cost of sending a container from Shanghai to New York was down 78% from a year earlier, while the figure for Shanghai to Los Angeles had plunged 81%, according to data published by Drewry Shipping Consultants Ltd., a maritime research consultancy.

Recipe for a glut

In less than two years, the ocean freight market went from one extreme to the other, as resources including ships, containers, trucks and warehouses went from shortage to glut, said Zhang Huafeng, Los Angeles chief representative at Transfar Shipping Pte. Ltd.

The speed of that shift has only made things worse. During the boom of 2021, ocean carriers ordered a record number of shipping containers while retiring fewer aging ones, Drewry Shipping said in a July report. In 2021, the global supply of containers grew by 13% — three times the previous trend — to almost 50 million twenty-foot equivalent units, or TEUs, a standard for cargo capacity in the shipping industry.

Ship owners have found themselves in a predicament that is similar to that of container buyers. When freight rates were surging during the export boom, they spent a lot of their profits on new ships.

However, new container demand has been falling since the fourth quarter in 2021, said one worker at a large container manufacturer, who told Caixin that inventory has been piling up at his factory and others.

The situation is only going to get worse as new ships get delivered, Zhang said.

Ship owners have found themselves in a predicament that is similar to that of container buyers. When freight rates were surging during the export boom, they spent a lot of their profits on new ships.

That has led to some 2.6 million TEUs worth of newly built capacity expected to hit the water in 2023, Drewry analysts said in an October report. “By over-ordering in the boom years, carriers have set themselves an enormous challenge to shuffle and make capacity magically disappear,” they said.

As freight rates have dropped, some carriers have been trying a number of measures to reduce their capacity such idling vessels and cancelling voyages, said DHL Global Forwarding in a late January report.

A total of 366 container ships were left inactive as of 13 February, according to DHL in a 14 March report, citing figures from shipping research firm Alphaliner. That figure is equivalent to 6.2% of the global fleet and up from 5.7% two weeks earlier.

“A choice to allow overcapacity to persist is also a choice to allow for low utilisation, and thus to allow for freight rates to continue to drop. This is a behaviour we know by a different word: A price war.” — Sea-Intelligence CEO Alan Murphy

However, these measures may not be enough because more shipping capacity is in the pipeline.

Some carriers did not adjust their business to the drop-off in demand last year, Container xChange said in a February report this year. “This can only be seen as a choice on the part of the carriers,” Sea-Intelligence CEO Alan Murphy was quoted as saying. “A choice to allow overcapacity to persist is also a choice to allow for low utilisation, and thus to allow for freight rates to continue to drop. This is a behaviour we know by a different word: A price war.” 

Container xChange saw margins tightening for freight forwarders and traders and predicted a period of market consolidation on the horizon.

Some industry observers were also worried that the market downturn could trigger a price war similar to the one that occurred in 2015-2016, which led to the bankruptcy of South Korea’s Hanjin Shipping Co. Ltd., once the world’s seventh largest container shipper.

New players, who entered the market when freight rates were high during the pandemic, could get squeezed out, leading to a further consolidation of the container shipping sector, Xu Kai, chief of the Shipping Informatization Research Department at the Shanghai International Shipping Institute (SISI), told Caixin.

However, major shipping companies are better positioned to fend off any price war that might occur over the next few years, due to their larger shipping capacity and greater economies of scale, said Wu Di, an associate professor at Dalian Maritime University’s College of Transportation Engineering.

Hope on the horizon?

However, some analysts see things getting better as China’s export outlook recovers.

The world economy is recovering, wrote Li Zongguang, chief economist at China Renaissance Holdings Ltd in an opinion piece last month. In February, the global manufacturing purchasing managers’ index (PMI) rose to 50 — a dividing line between expansion and contraction. But China’s official manufacturing PMI survey, new export orders started growing in February again for the first time in nearly two years, with the reading reaching 52.4, he said.

Xu at SISI also believes that global trade demand is set to recover in 2023, and the turmoil seen in the shipping industry will not worsen. Global inflation and interest rate hikes will not intensify, while product inventories in the US and Europe will gradually be consumed, leading to a steady recovery in Chinese exports, he said.

“Compared with the second half of 2022, the shipping market in 2023 will improve,” Dalian Maritime University’s Wu said. According to him, the recovery could be expected in the third quarter of this year, when exports usually tend to rise in anticipation of the Christmas season.

 Sam Chambers April 20, 2023 Slash247.com

Global trade patterns are being remoulded at a fast clip, with reshoring now clearly diminishing China’s dominance in the transpacific box trades.

Covid, a more strident China, tensions along the Taiwan Strait, and the war in Ukraine have all played their part in many companies looking for alternative places to source their goods lately.

Data from Oslo-based freight rates platform Xeneta published today shows the immense growth of Vietnam as a growing source for manufacturing goods bound for the US.

Focusing on the US, the last five years have seen a rise of 26% in containerised imports from Asia. However, of the 12 major economies in the region, China tied with Singapore in recording the lowest growth in these exports, with a 7% increase, according to Xeneta. Hong Kong was the only one of the economies not to grow volumes at all. Vietnam, meanwhile, saw a growth rate of 156% of containerised trade into the US between 2017 and 2022.

A similar trend emerges in terms of the share of imported volumes. In 2022, 56% of all containerised imports into the US from Asia came from China. The apparent strength of this figure clouds the reality that this share has actually fallen by 10 percentage points from 2017. Vietnam, on the other hand, has almost doubled its share, from 6% in 2017 to 11% in 2022.

The International Monetary Fund found that investments by foreign companies into China fell to their lowest level in close to two decades in the second half of 2022. They collapsed by 73% year-on-year, down to $42.5bn. Putting this into context, between the second half of 2020 and first half of 2022, foreign investments averaged $160bn in each half year.

By way of contrast, Vietnam has seen FDIs grow by 61.2% year-on-year across the first three months of 2023, including a 62.1% increase in the number of new foreign-invested projects. The processing and manufacturing sectors attracted the most investment here, accounting for around 75% of the total.

Into this year, the data to the US looks similar, while also highlighting the growth of new markets for Chinese exporters keen to fill the gap left by the Americans.

March saw a clear drop in exports from China to the US, with $3.6bn less trade than the year before. However, despite this significant fall, China’s total exports managed a year-on-year growth rate of 15% in March thanks to booming trade with Russia and countries in south Asia.

Emily Stausbøll, a market analyst at Xeneta, commented: “It takes time to build new production bases and make port infrastructure investments, as we’re seeing in, for example, Vietnam, Cambodia and Singapore, so the impact of investments today won’t be fully appreciated until tomorrow. This implies that the changing trade patterns we’re seeing now could just be the beginning of a far greater realignment.”

A recent study released by global consulting firm Kearney found that as many as 96% of American CEOs are evaluating reshoring as a strategy, an increase of 18% on 2022. Most already have committed to reshoring, or are already reshored.

“We seem to be heading toward a sustained reshoring movement,” said Omar Troncoso, a partner in Kearney’s consumer and retail practice. “Reshoring is becoming both a cause and an effect of companies significantly rethinking how they construct and operate a supply chain that will carry them forward into the next decade.”

Xeneta’s Stausbøll concluded: “Moving forwards, the evidence suggests we’ll see more trade and investment decisions based on geopolitics rather than, say, availability or price. How this progresses, and the speed of change, will be dependent on a range of uncertain factors – not least the escalating tension around Taiwan. So far, Europe has maintained its share of imports from China, with key leaders taking a more conciliatory approach than the US, but another major geopolitical event could transform that.”

 Sam Chambers April 11, 2023 Splash247.com

NASDAQ-listed Euroseas is setting the pace in the remerging container charter scene, announcing details today of a three-year-plus charter of a newbuild feeder for a firm $48,000 a day.

The Greek owner has just taken delivery of the 2,800 teu Gregos from Hyundai Mipo Dockyard in South Korea and sent it out on a 36 to 40-month charter to Asyad Lines, an Omani carrier.

The Gregos is the first of nine newbuilds Euroseas has contracted.

Aristides Pittas-led Euroseas has been making headlines for its solid charter deals secured of late.

After being fixed and failed in late March, Euroseas’ 2009-built, 4,253 teu Synergy Keelung was fixed last week for a minimum 24-month period at $23,000 with Thailand’s Regional Container Lines (RCL), a rate brokers Braemar described as “remarkably firm” given the fact that last panamax fixture managed to achieve a 12-month period only and Euroseas was able to achieve a 5% rate increase for a period twice as long.

“Not surprisingly most owners have readjusted their period ideas accordingly – particularlay for vessels in the 3,000+ teu segment, and given the low supply, other operators are likely to align with the new longer period trend,” Braemar noted in its latest container weekly report.

Charter rates rising markedly for all sizes of ships is reflected in the Alphaliner Charter Index, which is now, for the first time since June 2022, on a modest but visible rising trend.

 Sam Chambers April 13, 2023 Splash247.com

Toronto-based Brookfield Infrastructure Partners is buying Triton International, the world’s largest owner of containers, for $4.7bn.

“We believe this transaction provides an excellent outcome for all of Triton’s stakeholders,” commented Brian Sondey, CEO of Triton.

The sale represents a total shareholder return of approximately 700% since the 2016 merger of Triton and TAL International, Sondey said.

“Triton is an attractive business with highly contracted and stable cash flows, strong margins and a track record of value creation,” said Sam Pollock, CEO of Brookfield Infrastructure. “This transaction provides Brookfield Infrastructure with a high going-in cash yield, strong downside protection, and a platform for growth in the transportation and logistics sector. The transaction consideration also provides the opportunity for Triton shareholders to benefit from owning a globally diversified portfolio of infrastructure assets within a platform that has a proven history of generating long-term value for its shareholders.”

 Sam Chambers March 16, 2023 Splash247.com

The lull in box volumes is resulting in falling congestion and also in changes in container flows as reflected in the Container xChange Container Availability Index. 

The index, which measures the proportion of weekly import to export flows at ports around the world, shows that the share of imports from the total volumes handled at the ports of Los Angeles and Long Beach, America’s two largest gateways, has fallen 10% compared to last year.

As of Sunday, the number of containerships in US coastal waters had fallen to less than half of the count a year earlier, according to Bloomberg.

At Ningbo, meanwhile, China’s second largest boxport, after two years of handling more exports than empty returns and imports, the share of imported containers crossed into and has remained the majority since late last year as demand for exports fell. 

The sight of empty containers stacking up at ports across China has been something covered regularly by Splash in recent months. There were more than 5m empty standard containers stacked at ports across China in early February, twice as many as pre-covid, according to data from Dalian Maritime University.

In a sign of just how drastically the market has fallen, recently listed box booking platform Freightos said earlier this week it expects revenue growth of 15% to 21%, down from a prior forecast of 87%.

“Global shippers must now navigate in a tricky environment, as carriers still rely largely on blank sailings when they should close services outright,” Peter Sand, chief analyst at freight rate platform Xeneta, told Splash.

”We see 2023 as a year of excessive capacity management by the carriers,” Sand said, going on to list the likely order of defensive measures the lines will issue from their playbook: blank sailings, hot followed by cold idling, and finally demolition. Xeneta expects 400,000 teu to permanently leave the fleet in 2023. Year-to-date about 30,000 teu has been sold for demo.

Drewry’s World Container Index, a spot index published every Thursday, was down another $16 today to $1,790 per feu, 82% down from all-time highs recorded in September 2021.

March 6, 2023 Martina Li Asia Correspondent

Evergreen Marine Corporation has ordered 12,500 containers from Singamas Container Holdings for US$34.3 million, as the Taiwanese liner operator works towards expanding its business, despite the weak market conditions.

In January, Evergreen’s general manager Eric Hsieh unveiled plans to order 40,000 more containers – after having spent US$51.53 million on 9,800 new dry containers and 6,171 used boxes from Evergreen’s Singapore subsidiary in 2022. Last year, Evergreen also spent US$65.24 million to buy 7,800 reefers from Dong Fang International Container.

Evergreen also purchased its Singapore unit’s office for US$32 million to operate its own agency in the South-east Asian city-state, as the group expects delivery of 51 ships over the next two years.

Hsieh appeared to have been optimistic because of the pick-up in freight rates just before the Chinese New Year holiday, saying that Evergreen vessels on the Transpacific were fully loaded and lines attempted to impose a general rate increase (GRI) of US$1,000-$2,000 per FEU that month.

Hsieh had acknowledged there were long-running concerns about overcapacity. Alphaliner has forecast container shipping supply to grow by about 8% in 2023, with demand rising by just 2.7%. He said then, “We aren’t worried by the recent correction in container freight rates and we’re sticking to our expansion plans to boost our competitiveness.”

However, Hsieh thinks that stricter environmental regulations, such as the need for owners and operators to start meeting the requirements of the Carbon Intensity Indicator (CII), could remove about 10% of capacity from the market. The tonnage overhang therefore “may not be as serious as imagined”.

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By Martina Li in Taiwan 28/02/2023 The Loadstar

Zhong Gu Shan Dong Photo: VesselFinder

UPDATE: This article has been changed to reflect that there is no relationship or affiliation between Safetrans and Trasfar Shipping.

Safetrans Line has launched a liner service linking China with Morocco and Russia, joining several other newcomers on the Russian lane.

According to Linerlytica, the St Petersburg Direct service, calling at Qingdao, Shanghai, Ningbo, Nansha, Tangier (irregular), St Petersburg and Qingdao, began yesterday with the newly chartered 3,469 teu Heng Hui 2.

Meanwhile, three chartered ships from Zhonggu Logistics, of 3,398-4,872 teu, which Singapore line Transfar has diverted from its waning transpacific service, will soon join the loop, as will three more in April to boost frequency.

In its latest report released yesterday, Linerlytica remarked: “One year after the Russia-Ukraine conflict started on 24 February 2022, there have been significant shifts in the Russian container shipping landscape after sanctions shut off most of the traditional Baltic trade to Russia.”

Players unfazed by sanctions targeting Russia have jumped into the fray, with newcomers such as Safetrans, Torgmoll, Reel Shipping and OVP Shipping adding ships to the trade.

Congestion at the Russian Far East gateways of Vladivostok and Vostochny have generated demand for new services from Asia to the Black Sea and Baltic gateways of Novorossiysk and St Petersburg.

MSC retains a considerable presence in the Russian trades with feeder operations in all three Russian gateways while reputational risks have seen the other key European carriers withdrawing completely from the market.

Linerlytica analyst Tan Hua Joo told The Loadstar: “The Russian market is booming due to high cargo demand, with the Vladivostok gateway currently severely congested and carriers are opening new services to the Black Sea and Baltic gateways. Depending on which gateway, rates are highly elevated, starting from $6,000/feu.”

OVP, originally an LNG tank shipping business that was established in 2020, began container shipping operations connecting Vladivostok and Novorossiysk with China in June 2022. This week, OVP will offer connections to St Petersburg through slot purchases on Safetrans’ service.

Linerlytica estimates there are now 89 ships totalling nearly 92,000 TEU, serving the Russia Far East trade.

Russian container carriers have been acquiring tonnage to meet healthy demand, even as the overall freight market is bleak.

Anecdotal accounts from ship brokers indicate that FESCO and other Russian interests have been actively buying ships, as freight rates for Russia-linked routes remain steady.

Alphaliner reported that in the last 18 months, FESCO has purchased four boxships, with the latest additions being the 2008-built 698 teu FESCO Tatarstan (ex JRS Corvus) 2010-built 704 teu Acacia Ming, which were bought from Chinese owner Goto Shipping for $8.1m and $10m, respectively, in January.

FESCO Tatarstan has been carrying cargoes between Russian Far East ports and Asia, while Acacia Ming is pending delivery to the Russian operator, which just launched a new service linking Russia, India and Turkey.

FESCO currently owns 17 ships with capacities ranging from 508 to 3,091 teu, making it the 43^rd largest liner operator, with total capacity of over 29,000 teu. FESCO appears to be renewing its fleet, having sold the 1998-built 1,740 teu Vladivostok for demolition in January.

Russian forwarder Transit LLC, which launched its Russia-China liner service in the wake of international sanctions targeting Russia’s invasion of Ukraine, had bought its second ship in October. The 2005-built 660 teu Transit Lugovaya (ex Run Xing) was bought from Qingdao China Gem Ship Management, three months after the 2008-built 704 teu Transit Shamora (ex Run Chang) was purchased from the same owner. Supplementing its owned pair are six chartered vessels, taking Transit’s total capacity to 5,500 teu, making it the 100^th largest liner operator.

Brokers also told The Loadstar that Malaysian feeder operator MTT Shipping had sold the 2000-built 1,740 teu Pasir Gudang to Russian interests for $10m in January. The ship has been renamed Crystal St.Petersburg and reflagged from Malaysia to Sierra Leone. While the identity of the beneficial owner appears to be obscured, Crystal St.Petersburg is now classed by the Russian Maritime Register.

Sam Chambers January 17, 2023 Splash247.com

As the liner shipping party comes to a close, ships are cascading back from the long-haul east-west lanes to regional trades.

Latest data from consultancy Linerlytica shows that the total boxship capacity employed on the intra-Asia trades are rising again after a two-year decline.

Intra-Asia capacity peaked in early 2020 at 3m teu but fell to a low of just 2.6m teu by mid-2022 as carriers sought to maximise profits by deploying any available capacity, however small, on the transpacific and Asia-Europe tradelanes.

New Linerlytica data shows the slide has reversed with intra-Asia capacity now back to 2.8m teu with more newbuilds set to enter to the region soon.

Rates on many routes in the highly competitive intra-Asia region such as from China to Southeast Asia are already operating at below breakeven levels, Linerlytica warned in its latest weekly report.

 Sam ChambersJanuary 17, 2023 Splash247.com

Secondhand boxship prices are falling off a cliff. After a very muted second half of 2022 in terms of sales, the opening 17 days of 2023 have registered some severe drops in prices for the previously buoyant sector.

Brokers Southport Atlantic note the sale of the 2007-built, 2,553 teu G. Ace as a good illustration of the fall in values. The ship, just sold to Chinese interests, managed to obtain $13.7m, a sister ship, ST Ever, going for as much as $46.5m 12 months prior.

Similarly, the sector’s most aggressive buyer in recent years, Mediterranean Shipping Co (MSC), has just picked up a comparative bargain, paying $9.75m for the 21-year-old, 2,478 teu Buxcontact. A sister ship went for $23m 12 months ago.

“The candidate list continues to grow and pricing is under pressure. It will be interesting to note where new benchmarks land in the coming weeks,” the most recent container report from Braemar noted.

Boxship S&P volumes fell back last year from the record seen in 2021 with Clarksons Research tallying 0.6m teu sold in 2022 down from 1.6m teu. Secondhand prices fell notably in the second half as dropping markets and increased investor uncertainty took their toll with Clarksons’ secondhand boxship index falling 46% across the year.

“S&P price prospects are unlikely to improve anytime soon, due to the looming overcapacity triggered by the monumental orderbook,” a recent report from Alphaliner noted, suggesting today’s market could hold “interesting opportunities” for buyers that have so far been excluded from the market due to the prohibitive cost of tonnage.