Container shipping update

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For months, the world’s largest shipping group has been struggling to cope Shortage of containers and a Lack of berths in the port, Because demand fluctuations and Covid-19 have put pressure on global logistics. Now, another shortage issue has attracted the attention of the industry: the shortage of ships themselves.

Executives warned that despite the recent surge in new ship orders, given the surge in demand for their services and the complexity of restructuring the fleet due to environmental reasons, the supply of container ships may remain tight in the next few years.

Xavier Destriau, chief financial officer of Israel Star Group, one of the world’s largest shipping groups, said that since many companies are hesitant to order new capacity before this year, and many old ships are being phased out, the ship The tight supply constitutes a “potentially significant threat.” Scrap overdue.

“We are studying the potential risks of ship supply pressure,” he said. “We are talking about three, four or five years.”

His warning was echoed by Andi Case, the CEO of Clarksons, the world’s largest shipping broker. He stated that since 2007, the number of global shipyards has fallen by two-thirds. To about 115. .

After the container shipping group achieved unprecedented profits during 2020-21, those still operating shipyards received a large number of orders. The surge in demand for goods before has stimulated a significant increase in freight rates since the second half of last year.

According to data from Clarkson Research, its analysis department, the shipping group has ordered 3.2 million 20-foot containers in 2021, the most in a year on record.

But some people worry that this is still not enough to meet global demand. New orders are equivalent to 20% of the current fleet capacity-higher than around 10% in 2019, but well below the 60% level in 2007.

The shortage of ships increases the prospect of continued high freight rates, albeit below the current excessive levels. In the past ten years, the industry has been plagued by the opposite problem. The surplus of ships has led to tight profitability, leading to the collapse of South Korea’s Hanjin Shipping and forced integration.

Despite the increase in global demand, some people in the industry still privately expressed concerns about over-ordering, pointing out that the shortage of container equipment and infrastructure bottlenecks are more pressing issues.But the lack of additional capacity means that the supply chain is more susceptible to one-time outages, such as Chinese ports closed This has disrupted global trade this year.

Another reason for the industry’s hesitation is the type of ships ordered considering the upcoming environmental regulations.

The global energy efficiency rules implemented from 2023 have stimulated people’s interest in LNG-powered ships, but since October 2019, the percentage of orders in total orders has remained unchanged.

Compared with traditional fuels, liquefied natural gas reduces greenhouse gas emissions by about a quarter, but it is controversial because it locks a large amount of emissions for 25 years. Environmental activists believe that the industry needs to make greater strides towards clean fuels such as green ammonia or hydrogen.

Due to technical and regulatory uncertainties, Maersk, the world’s largest container shipping group, has always avoided ordering LNG-powered ships.

But Destriau and Case believe that shipping companies should accept liquefied natural gas and take immediate action to reduce emissions, rather than waiting for new technologies to emerge. Zim has signed a long-term charter agreement for 20 liquefied natural gas fuel vessels this year.

“Is it OK to wait 10 years and say’maybe the hydrogen will be ready by then’?” Case said. “The driving force should be to eradicate heavy oil-driven ships.”