The outlook for the global shipping sector for the coming 12 to 18 months remains negative, according to Moody’s new report. The Vancouver-based company is the world’s largest lessor of container ships. GREENSTEAM’S GLOBAL SHIPPING OUTLOOK FOR 2020 & BEYOND Cutting costs while reducing carbon emissions is top of every shipping operator’s agenda.
According to Alix Partners, the frustration with the opacity around BAF charges will likely cause some of the shippers, freight forwarders and NVOCCs to propose their own formulas and press for adoption, thus driving the movement towards transparency and standardisation. COVID-19 hospitalizations rise to highest since early April, Residential rental freeze extended into 2021, Industrial lease rates on upward trajectory, experts say, Pandemic mental health crisis calls up, suicides down, UPDATE: RCMP must respond to spying allegations: lawsuit.
“Some container liners have indicated that the activity in China is picking up, which is a positive, but we are also mindful of the potential for reduced commercial activity in Europe and North America as these regions battle the coronavirus. The outlook for the dry bulk and container shipping segments remains negative with supply likely to exceed demand significantly. By utilizing the power of data and machine learning, these twin goals can be achieved. Moreover, the pressure of IMO 2020 is now being further compounded by the influence of the coronavirus, the report recognised. The company also noted that all 123 ships in Seaspan’s fleet have secured long-term charters. There is a downside risk that the EBITDA of shipping companies globally could decline by 25-30%, similar to levels last seen in 2016 when Hanjin Shipping Co. Ltd. went bankrupt in one of the largest recent failures in the sector. That could have serious consequences for companies like Seaspan Corp. “We had previously expected demand and supply growth to be largely balanced across these three key shipping segments in 2020.
An Ocean Network Express (ONE) shipping alliance container ship being unloaded at GCT Deltaport at Roberts Bank. “The lack of transparency and standardisation of those variables is a constant irritant to shippers, freight forwarders and NVOCCs. The global pandemic has significantly reduced container traffic on the transpacific and other major trade routes | Chung Chow, 2020 economic outlook grim for global container cargo shipping sector, Winners announced in BIV's 2020 BC CEO Awards, Proportion of non-gamblers rises in B.C. I don’t think I would trust anybody who says they can confidently predict what is going to happen.” •. It posted operating earnings of US$687 million on revenue of US$1.13 billion in 2019, and, according to Atlas Corp.’s first-quarter 2020 financial results, the company remains bullish on Seaspan’s prospects for 2020, despite grim global economic outlooks. So say analysts from U.K.-based shipping consultancy Drewry. 2020 marks the beginning of a new era for the container shipping industry. If those crew members or their unions do not agree to contract extensions, ships will be under-manned and considered unseaworthy. On the positive side, the sector continues to benefit from scrapping related to IMO 2020,” the rating agency said.
Can the stalemate over Cyprus be overcome?
As demonstrated by the report, there is no standard BAF formula in use across the board, nor is there any widely recognised mechanism to account for the effects of the various sulphur reduction methods on the type of fuel used and the amount consumed.
The companies awarded by MEA get the opportunity to work closely together with a transnational team of Marine Energy experts on both the technical advancement of their technology, as well as the development of their commercial strategy and business plans. The outlook for the global shipping industry has changed to ‘negative’ from ‘stable’ in the wake of the coronavirus outbreak, Moody’s Investors Service said in a new report. Financialmirror.com is the leading English-language business news site in Cyprus, reporting on business, the economy, energy and shipping.
The situation is more positive for tankers at the moment given the recent sharp drop in oil prices. 2020 economic outlook grim for global container cargo shipping sector Protracted pandemic downturn could sink weaker carriers: U.K. analysts ET One of the key factors impacting recovery is the oversupply of vessels exceeding the demand in key shipping segments, which is likely to extend into 2021. All rights reserved. Therefore we should not [discount] the possibility that one of the weaker carriers could reach Hanjin-type levels and disappear.”.
Both spot and charter rates have risen significantly in the past week and are likely to remain at elevated levels through April following the announcement of discounts on oil sales by Saudi Arabia. The rating agency believes the pandemic will complicate and possibly delay US-China “phase two” trade negotiations, and UK-EU and US-EU negotiations. The bunker adjustment factor (BAF) has become even more complex with the introduction of IMO 2020, with each line having its own variation on a basic formula covering a range of areas including fuel price, ship size and trade. 2020 Global container shipping outlook Container lines are facing growing pressure to standardise surcharges, which have become ever more complicated with the introduction of IMO 2020, the IMO’s 0.5% sulphur cap on fuel content effective January 2020, a report entitled “2020 Global Container Shipping Outlook” by Alix Partners found. “The crisis has also laid bare the vulnerabilities of just-in-time supply chain management and could prompt companies to consider moving supply chains closer to their final markets and building redundancies,” Moody’s said. The outlook for the global shipping industry has changed to ‘negative’ from ‘stable’ in the wake of the coronavirus outbreak, Moody’s Investors Service said in a new report.. One thing’s for sure, freight forwarding never has a dull moment.
With the shipping industry becoming increasingly competitive, and with regulations forcing operators to increase their environmental efforts, it is increasingly obvious that traditional approaches are no longer good enough. The Moody’s report said that for dry bulk companies, the slow resumption of manufacturing operations in China is a plus because it suggests improved demand for coal and iron ore, two key dry bulk commodities. Global Shipping Market Review - May 2020. It gives rise to the suspicion that some carriers are using the BAF as a revenue-raising tool as well as a cost-recovery and risk-sharing mechanism,” the report highlighted, adding that “the uncertainty can lead to tense relationships that take a toll on both sides and add to the headwinds the container shipping industry faces.”. Key developments in the global shipping market & outlook for the key shipping market segments. The Financial Mirror weekly newspaper was established in 1993 and is the primary source of news and analysis about the Cyprus economy. However, the outlook for the tanker segment is stable helped by a temporary dislocation in the oil market with high demand for floating storage pushing up tanker rates. “Still, the longer-term picture remains uncertain for the tanker sector and, given the global slowdown in growth, we do not expect a large increase in demand for tankers in the medium term. In conclusion, the Moody’s report said “we would consider revising the outlook to stable if both the oversupply of vessels declines materially such that shipping supply growth does not exceed demand growth by more than 2% and year-over-year EBITDA growth appears likely to be between -5% and +10%.”, Limassol and Paphos hotels, bars and restaurants have sounded the, The government announced Thursday it would provide another €30 mln, Experts expect an increase in the number of COVID-19 hospital, Apart from lockdowns in Limassol and Paphos, the government has. In a May 14 market update, company research managers Philip Damas and Simon Heaney mapped out forecasts as best they and their company could for the container shipping sector in what are uncharted waters. By downloading this whitepaper, you will discover: The numerous benefits of machine learning, Operating costs are set to rise by at least 3% post-2020, so reducing inefficiencies is key, The 2020 sulphur cap has been designed to cut shipping’s 15% contribution to global sulphur emissions, The annual fuel bill for the shipping sector is set to soar upwards by up to $60 billion post-2020, Daniel Jacobsen, CTO and co-founder at GreenSteam. Positively for container shipping companies, the recent drop in oil prices will help offset fuel costs, especially in light of the IMO 2020 low sulphur fuel regulations that came into effect in January.
Moody's - Global shipping industry outlook changed to negative as coronavirus threatens earnings 19 March 2020 London, March 19, 2020 -- Earnings of rated shipping companies will likely decline by … Moody’s expects the supply-demand balance to tilt toward oversupply for the container shipping and dry bulk segments, especially in the first half of this year. And to do that, machine learning is key. Heaney noted that a scenario in which the pandemic lingers deep into 2020 and is followed by another outbreak in 2021 would result in a 12% drop in container traffic this year followed by another 6% decline in 2021. What is more, there is a shift toward more regional supply chains and domestic production of certain types of goods which would lead to a reconfiguration of a number of shipping routes, according to Moody’s, although the ultimate effect on tonne-miles, a key revenue driver, is uncertain at this point. “So as we move into the current market downturn, these Z scores will deteriorate. The devastating disruption to trade and the subsequent shock to global economies in 2020’s first half will have a lasting impact on how ocean carriers ride out the bad weather created by the global pandemic. “Our view of the segment also takes into account both the significant slowdown in Chinese manufacturing of containerised goods and the more recent reports of store closings that are likely to lead to reduced inventories. It will be all hands on deck to keep container shipping companies in B.C. Damas, Drewry’s managing director in charge of logistics practice, noted that Drewry’s Z scores were based on financial data from the end of 2019. BIFA has launched a free App for the freight industry available on both iPhone and Android allowing you to get the latest information direct to your phone. The key drivers of the negative outlook are a combination of expectations that the global economy will shrink in 2020 due to the impact of the … That will force more cancelled sailings and further disrupt global trade and supply chains. Only three, according to Damas, were relatively secure. “We now expect the aggregate EBITDA of rated shipping companies to fall by around 16%-18% in 2020, nearly doubling from our previous projection of a drop of around 6%-10%,” said Maria Maslovsky, Vice President – Senior Analyst.
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