BIMCO: Container shipping lines earned $42 less per TEU in 2016

08/02/20170 CommentsSEO SEO
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The Baltic and International Maritime Council (BIMCO) reported that shipping lines earned 7% less per TEU in 2016 than in 2015 if they operated in the spot market on all Shanghai Containerized Freight Index (SCFI) trade routes.

According to the organization, the drop was caused by the low rates received in the first half of 2016, as the average rate received in the second half of 2016 was 22% higher than the rate received in H2 2015.

The analysis showed that trade routes from Shanghai to Santos, Durban, and Australia/New Zealand hit the highest USD per TEU in more than five years, as the freight rates increased through the second half of 2016.

BIMCO’s Chief Shipping Analyst Peter Sand commented that there are still some positive things to consider: Shipping lines took measure in terms of network optimization, scrapping and more careful deployment around the peak season:

Despite the average rate for 2016 is lower than 2015, 2016 might stand out for something positive, where the container shipping lines took some of the measures needed to adapt to the new normal, where the growth in demand is equal to the GDP.

The container shipping lines achieved a lower growth rate in supply higher than the demand growth for the first time since 2010, by using the tools they had at hand and consolidated, scrapped and postponed deliveries.

If the Trade-to-GDP-Multiplier stays at the current level and the International Monetary Fund is correct with their projection, the container shipping industry will be status quo in 2017 and the freight rates will most likely stay at the same level as last half of 2016. However, the container shipping lines will increasingly focus on reaping the benefits of consolidation and we will most certainly see their profits go up.

China Containerised Freight Index (CCFI) showed a 19% drop in 2016, compared to 2015, as BIMCO explained: “The CCFI includes both spot and long-term rates based on the actual transactions within a two weeks periods, while the SCFI focuses on the average spot booking price for one week. By that, the CCFI reflects the real progress in container shipping rates on a short-term basis. Thereby, the CCFI convey the current tendency in the container freight development and the SCFI indicate the current market development.”


Image: Pixabay

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