By Mike Wackett,

(The Loadstar) – The shock waves from the collapse of a top-20 container line reminiscent of Hyundai Merchant Marine (HMM) could possibly be the catalyst for a change in provider behaviour, in response to Drewry.

In a Q&A session following the delivery advisor’s Container Freight Rates & Shipping Market Outlook webinar in the present day, container analysis director Neil Dekker mentioned if HMM had been to fail, it “could prompt other players to change their business plans” and, “hopefully, they might change some of their commercial practices”.

The presentation by Mr Dekker, with Drewry director colleagues provide chain advisor Philip Damas and head of analysis merchandise Martin Dixon, was nearly totally adverse on the quick prospects for container liner delivery, portray a really bleak image for traders.

According to the analysts, an estimated international demand development of simply 2.1% this 12 months and a couple of.9% in 2017, in opposition to a forecasted mobile capability enhance of 8.4% this 12 months and 4.2% subsequent, was assured to maintain ocean freight charges below stress and trigger extra monetary stress for carriers.

The “trigger point” for distressed carriers was not too many months away, believes Mr Dekker, and though consideration is targeted on HMM presently, the South Korean container line wouldn’t, in his opinion, be the one provider to hit hassle.

Mr Dekker mentioned even Maersk Line, with its market-leading decrease unit prices, wouldn’t be capable to escape the complete influence of the traditionally low charges on its backside line.

“We expect all the carriers to report very weak Q1 financials,” he mentioned. Drewry mentioned the speed conflict of the ultimate quarter of 2015 had continued at a tempo, with the consequence that international spot charges had been an enormous 47% down year-on-year within the first quarter.

Contract charges, which carriers had been in a position to fall again on to previously to maintain their high line income more healthy, had additionally come below extreme stress within the first three months of this 12 months, monitoring down 20% on the identical quarter of 2015.

In truth, circumstances will worsen when the complete impact of the 1 May transpacific price negotiations now being finalised is factored into the information later within the 12 months, mentioned Drewry.

With additional proof of how dysfunctional the Asia-North Europe commerce has turn into, Mr Damas mentioned many backhaul charges had been now greater than headhaul costs – “abnormal market behaviour”.

On the outlook for alliances, each Mr Dekker and Mr Damas agreed that the G6 grouping was trying particularly weak, given the anticipated takeover of APL by CMA CGM and the potential demise of HMM.

The analysts additionally thought that the CKYHE alliance was threatened by the merger of the 2 Chinese carriers, Cosco and CSCL, with the brand new entity reportedly becoming a member of with CMA CGM to type a brand new mega-allaince.

The influence of the alliance shake-up may lead to simply three teams dominating east-west trades, mentioned Drewry, leaving weaker gamers with nowhere to go.

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