Making way for new comers in ocean cargo arena

As we noted last year at this time, the poor handling of Hanjin Shipping’s downfall left many shippers scrambling for alternative carriers when the industry was also being disrupted by new alliances and consortia. Maritime analysts for Xeneta – a global benchmarking and market intelligence platform based in Oslo, Norway – note that new alliances, structural change and positive economic trends have transformed the container shipping market over the past year.Furthermore, this disruption is driving growth and pushing business performance figures from “deep red into black,” says Xeneta CEO, Patrik Berglund. He cautions, however, that carriers must continue to watch their spending.“Long-term rates are in some cases up by triple digits year-on-year,” he says, and a recovery of the container shipping is well underway.”He points to Maersk’s recent 2017 Q2 financial report indicating that higher freight rates propelled revenues upwards by 8.4% to almost $10 billion for the quarter. At the same time, Hapag-Lloyd may be on its way to triple its earnings this year.“We remain optimistic with regards to the remainder of 2017, but the longer term becomes more complex, as more mega vessels come into deployment,” he says.Berglund observes that a “staggering” 78 new mega ships are due to come online for the Asia-Europe trades over the next two years, pushing capacity up by over 23%.“Mega-ships make obvious sense in terms of economy of scale and optimizing transport costs,” he says, “but when you have this much of a capacity injection it requires a huge demand increase. Where will that come from?”