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SeaIntel Maritime Analysis

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Weekly

Indicators

30 Jan-5 Feb 2017

SeaIntel Sunday Spotlight February 5, 2017 – Issue 298

Windows User

Content

Editorial: Getting ready for the alliances Page 2

Carriers benefitting from Panama Canal Page 3

Carrier On-time Performance in 2016 Page 6

January 2017 IMF world outlook update 2

Carrier Service Changes Page 17

Carrier Rate Announcements Page 18

SeaIntel products Page 20

Executive Summary

Carriers benefitting from Panama Canal

Following an initial decline, the spread in Pacific freight rates between USWC

and USEC has been steadily increasing, with carriers now fully benefitting from

the savings from the expanded Panama Canal.

Carrier On-time Performance in 2016

Global schedule reliability rose Y/Y by 4.5 percentage points to 82.8% with all

carriers improving their on-time performances. Wan Hai was the most reliable

carrier in 2016.

January 2017 IMF world outlook update

IMF projections for advanced economies have been upgraded, but US

protectionist policies bring uncertainty to the economic forecast.

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2

Editorial: Getting ready for the alliances

The upcoming alliances have not yet released their named vessel schedules for the

new alliance networks, so we cannot yet say anything on the capacity being offered by

the individual alliances, and what the competitive position will be in the individual

trade lanes. We also do not yet know the scope or actual deployment plans of the

extended Vessel Sharing Agreement between the 2M alliance and HMM, and “The

Alliance” has still not released their final service rotations, and many ports are still left

as left as placeholders, not least the choice of hubs in South East Asia and East

Mediterranean, and their intended ports of call in the West Coast of North America.

Hopefully, the carriers will publish these details in the coming weeks, not least if they

would like this year’s Transpacific contract negotiations not to become a miasma of

Fear, Uncertainty and Doubt. Carriers have rarely been stellar in their communications

efforts, and these things need to be clear: what services will you offer, what ports will

you call, and what vessels will you deploy? The clock is ticking.

Next, carriers will likely want to show a strong level of confidence in their new alliance

networks, and nothing will erode such confidence than a collapse of freight rates

leading up to the new alliance launch in April. So while the carriers will be looking with

anticipation to their new networks, the outgoing alliances still need to keep a keen eye

on the Supply/Demand balance in individual trade lanes.

The carriers have shown a strong resolve over the 2017 Chinese New Year, cutting a

record breaking 290,000 TEU from Asia-Europe, while the 205,000 TEU of blanked

capacity on Transpacific was twice what we saw in 2016. This resolve needs to be

extended into March if the carriers wish for a strong start to the contracting season.

The March 1st Transpacific General Rate Increase (GRI) is currently only supported by

a handful of carriers (see page 18), and there is currently no steam for an Asia-

Europe GRI. The March GRI may become pivotal in the coming negotiations, and a

strong showing of carrier support, and possibly blanking of a few vessels at the end of

February may be required. But before that, please publish the new schedules.


3

Carriers benefitting from Panama Canal

Following an initial decline, the spread in Pacific freight rates

between USWC and USEC has been steadily increasing, with

carriers now fully benefitting from the savings from the expanded

Panama Canal.

On June 26th 2016 the new set of locks

in the Panama Canal were officially

opened, and a new era for not only the

canal, but also shipping lines and cargo

owners was initiated.

We have previously analysed how this

has led to a battle between the Suez

Canal and Panama Canal for the routing

of Asia-USEC services, as well as also

seen how it has resulted in a significant

re-deployment through the Panama

Canal where the former Panamax

vessels have been rapidly replaced by 8-

10.000 TEU vessels.

Due to the longer sailing distances and -

historically – the smaller vessels, the US

East Coast all-water route naturally

carries a price premium compared to the

route straight into the US West Coast.

However, following the upsizing of

vessels through Panama, it is clear that

the unit costs for the carriers through

this route have declined. Additionally,

the shift of some services back from

Suez to Panama have also to some

degree shortened the sailing distances,

added further impact on the unit costs

for the carriers.

The question we are exploring this week

is whether this saving in unit costs is

principally benefitting the carriers or the

shippers.

As we wish to analyse the effect of the

Panama Canal on freight rates, the

actual freight rate level in itself makes a

poor object for study. This is because

the actual freight rate is not only

influenced by the opening of the

Panama Canal, but also by the overall

freight rate developments in the

Transpacific markets due to

supply/demand developments, as well

as possible fights for market share

amongst the container lines.

However, there is one measurement

which can isolate the effect of the

Panama Canal on freight rates, and that

is the price premium the US East Coast

cargo commands versus the US West

Coast cargo. This difference is calculated

on the basis of the SCFI spot rates

published by the Shanghai Shipping

Exchange.


4

In this case both trades are subjected to

American import developments, and any

sudden changes in the premium will in

the main be due to a Panama Canal

effect.

The premium can be measured either as

a straight value in USD/FFE based on

the SCFI spot rate index, or it can be

measured as a percentage on top of the

lower US West Coast rate. Figure 1

shows the development in the rate

premium measured in USD/TEU and

figure 2 shows the relative difference in

per cent.

The development is showing an

interesting pattern. We see a sharp

decline in premium at the time of the

expansion – a decline that is extremely

visible in the relative measure shown in

figure 2. That seems to indicate that

there was a quick shift in the market

towards the shippers getting the benefit

of the lower unit costs associated with

the new deployments.

However, this effect can be seen to have

been reversed in the 6 months following

the expansion. The reversal appears

very sharp in figure 1, but in this

context it should be kept in mind that

the oil price has been increasing in this

period, and consequently the price

difference in absolute terms will also be

increasing to compensate for this effect.

On the relative scale shown in figure 2,

we see that following an initial stable

period where the premium declined to

40%, this has now shifted to a premium

around 60%.


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In figure 3 we look at the USEC price

premium in a more extended historical

context. We do see that the premium

tends to have fluctuated significantly

over time. The spike seen in 2015 was

particularly driven by the labour

disputes on the US West Coast resulting

in significant cargo volumes being

shifted to the east.

It is clear to see that the rapid decline in

premium following the expansion led to

the lowest premium on record in 3rd

quarter 2016. But it is equally clear to

see that the recent months’ of increases

had resulted in a situation where the

current premium for shipping to the

USEC is broadly in line with the long-

term historical average.

This in turn can chiefly be interpreted as

a development wherein the carriers

initially gave away the savings to the

shippers, but have gradually managed

to re-acquire the savings for

themselves.

For carriers that have been through

an extremely tough year in 2016 in

terms of financial performance, the

re-acquisition of the Panama Canal-

based savings must come as a

welcome relief.


6

Carrier On-time Performance in 2016

Global schedule reliability rose Y/Y by 4.5 percentage points to

82.8% with all carriers improving their on-time performances.

Wan Hai was the most reliable carrier in 2016.

This week, SeaIntel published the

January 2017 edition of the Global Liner

Performance (GLP) report, based on

more than 12,500 vessel arrivals

registered in December 2016. The

release of the January GLP report makes

it possible to conduct an analysis of the

development in on-time performance for

the entire year of 2016 and compare it

with the developments we have recorded

in 2014 and 2015.

2016 has been a memorable year due to

various incidents which shook the

container industry. The demise of Hanjin

undoubtedly brought some turbulence

into the industry as some global carriers

were forced to reshape their service

networks and adjust to market needs.

The merger of CSCL into COSCO

impacted the number of global players in

the industry and, Going forward we will

see increased consolidation, with APL

having been acquired by CMA CGM,

UASC acquired by Hapag-Lloyd,

Hamburg Süd acquired by Maersk line,

and the three Japanese liners – MOL,

NYK, and K Line – merging from 2018.

Carriers also faced challenges in finding

the right balance between supply and

demand, as overcapacity heavily affected

spot rates in various trade lanes and

carriers’ P&L sheets turned red.

However, it is worth noting that despite

various incidents in the container

industry, 2016 was the best year for

schedule reliability since SeaIntel started

measuring in 2011, especially over the

summer months, when the average

global on-time performance score

jumped to its highest historical level of

85.9% in June 2016.

In this issue of the SeaIntel Sunday

Spotlight we dig into the yearly

developments in global on-time

performance for the Top18 carriers and

compare their on-time performance on

the main East/West trade lanes.

Methodology

The data for this analysis stems from

SeaIntel’s industry-leading Global Liner

Performance (GLP) database. Each

month, SeaIntel records the schedule

reliability across an average of 12,500

vessel arrivals in more than 300 ports


7

around the world on 34 deep-sea trade

lanes. The Global Liner Performance

report covers all the Top18 carriers,

along with more than 80 niche carriers

which we have decided to exclude from

this analysis. The GLP database currently

contains more than 690,000 individual

global vessel arrivals.

The carriers’ schedule data reflects

proforma schedules 15-45 days into the

future, and ”on time” has been defined

as actual vessel arrival within plus or

minus one calendar day of the proforma

schedule.

It is worth mentioning that the individual

carrier performance is dependent on the

performance of the services carriers offer

to their customers, irrespective if they

are services the carriers operate

themselves, through slot-charters or a

Vessel Sharing Agreement (VSA), or

through a carrier alliance. That means

that carriers are benchmarked from a

shipper’s perspective across all the

services they offer to their customers,

rather than merely on the services and

vessels they operate themselves. We

have defined this measurement as

“commercial performance” versus the

more carrier-focused “operational

performance”.

For the sake of brevity, we decided to

include six main east-west trade lanes in

this analysis. We will focus on Asia to

North Europe, Asia to Mediterranean,

Asia to USWC, Asia to USEC,

Transatlantic EB and Transatlantic WB.

Additionally, the on-time performance for

each trade lane is based on the following

figures for vessels arrivals per year:

- Asia to Mediterranean: > 4,600

- Asia to North Europe: > 4,100

- Asia to USWC: > 3,800

- Asia to USEC: > 3,900

- Transatlantic EB: > 6,900

- Transatlantic WB: > 5,600

Global Performance

Throughout 2016 most deep see trade

lanes experienced an improvement in

their schedule reliability scores, which

was reflected in the global score. The

global reliability figure remained above

83.0% in the period from April 2016 to

November 2016, recording a new all-

time high of 85.9% in June.

While the schedule reliability numbers by

themselves do not provide any

perspective of causality, it does seem

likely that the improvements in on-time

performance are to some extent driven

by the lower bunker oil prices, as the

costs to catch up on delays were less


8

severe than in the years with higher oil

costs.

Figure B1 illustrates the development of

annual schedule reliability over the last

five years. Overall, schedule reliability

experienced an increase of 4.5

percentage points from 78.3% registered

in 2015 to 82.8% in 2016, and 10.2

percentage points above the level of

2014. It is important to take away that

while schedule reliability certainly has

improve in both 2015 and 2016, this is

to some degree a reflection of just how

poor reliability was in 2014, as 2016 is

just a few percentage points above what

we saw in 2012 and 2013.

Figure B2 provides a closer look at the

developments in quarterly global

schedule reliability in the period from

2011-Q3 to 2016-Q4. It is evident that

2015-Q1 was the quarter with the lowest

on-time performance, 69.6%. This was

primarily fuelled by the labour dispute in

the US West Coast ports, and the

resultant massive congestion and delays

of up to several weeks.

During the following three quarters

schedule reliability jumped by an

incredible 15.2 percentage points, hitting

84.8% in 2015-Q4 and remaining in the

range from 78.0% to 85.2% throughout

the following four quarters of 2016.

Top18 Carriers’ Performance

The Top18 carriers’ annual on-time

performance for 2014-2016 is depicted

in figure B3. Based on the positive trends

in global reliability, it is hardly surprising

that all Top18 carriers experienced an

improvement in their on-time

performances. The greatest Y/Y increase

of 8.5 percentage points was recorded by

MSC, followed by Wan Hai, ZIM and

UASC with 6.5, 5.6 and 5.4 percentage

points, respectively.

In 2016 Wan Hai achieved the greatest

level of schedule reliability, scoring

88.0% even though the carrier had been


9

ranked fifth in 2015. The top performing

carrier was followed by Hamburg Süd at

86.6%, ZIM at 84.9% and MOL at

84.8%.

Table B3 clearly shows how 2016 took a

major deviation on a carrier level, as the

traditional best performing carrier,

Maersk Line, dropped four spots to the

fifth place, having been on the top of the

on-time performance tables in every

year in 2012-2015. Table B3 shows that

the Maersk Line did in fact not see on-

time performance deteriorate, but rather

remained relatively stable at 83.0-

84.5%, while the four carriers that

outperformed them in 2016 saw their

schedule reliability improve considerably

in 2016. The long-term “second-placer”,

Hamburg Süd, also came second in

2016, but his time to Wan Hai. That

being said, looking over the entire period

of 2012-2016, Maersk Line and Hamburg

Süd outperforms the other carriers

considerably 85.8% and 84.7%,

respectively, with Wan Hai coming in

third at 81.4%.

The gap between the best and the

poorest performing carriers decreased

from 7.2 percentage points in 2015 to

5.9 percentage points in 2016, which

indicates that the closer cooperation

between carriers, either through

alliances, VSAs or slot charter

agreements, also leads to less diversity

in the on-time performance.

However, when we looked at

development on a monthly level, we

could see that the difference between

the best and the poorest performing

carriers narrowed from 20.5 percentage

points in April 2015 to approximately 5

percentage points in April 2016, yet it

was still above 11 percentage points for

the last two months in 2016. It will be

interesting to see how the new alliances

and increased consolidation will impact

the diversity in schedule reliability, and

whether we will see any individual

alliance aiming to offer substantially


10

better schedule reliability than

competition.

Trade Lane Performance

The schedule reliability performance on

the main East/West trades lanes in 2014,

2015 and 2016 is presented in figure B5.

It is evident that all main trade lanes

experienced an increase in schedule

reliability, except for Asia-Mediterranean

and Asia-North Europe, which took a

slight dip and declined Y/Y by 0.4 and

7.8 percentage points to 83.3% and

79.4% in 2016, yet still outperforming

the levels of 2014 by 13.5 and 12.3

percentage points respectively. Despite a

slight decrease in reliability in Asia-

Mediterranean, the trade lane score was

still the highest compared to other major

East/West trades.

Compared to 2015, the most significant

improvement in schedule reliability was

recorded in the Asia-US West Coast

trade, up 18.9 percentage points to

81.0%. The second greatest increase of

15.8 percentage points was recorded in

Transatlantic Westbound, scoring 78.1%.

According to figure B5, schedule

reliability reached 80.0% in the Asia-US

East Coast trade lane in 2016. That was

the lowest Y/Y increase of 4.1

percentage points, yet it still showed a

significant rise of 17.4 percentage points

compared to 62.6% seen in 2014.

Finally, we look into schedule reliability

development on a quarterly level in the

period from 2012-Q1 to 2016-Q4. The

results are shown in figure B6.

Overall, looking into figure B6 we can

see that from 2012-Q1 up to 2016-Q4

the differences in schedule reliability

scores across the major East/West


11

trades were wide and fluctuated

continuously. This was not the case in

the last three quarters, when the trades

seemed to follow similar trends even

though they cover very different

geographical regions.

2016 was an important year in terms of

schedule reliability. Four major

East/West trades reached the highest

historical levels ever seen in 2016-Q3:

Asia-Us East Coast (87.1%), Asia-US

West Coast (89.5%), Transatlantic

Eastbound (86.6%) and Transatlantic

Westbound (86.0%).

Looking at historical developments, we

could see that Asia-US West Coast

experienced the major decline in

schedule reliability, dropping to an

abysmal level of just 16.8% in 2015-Q1

due to labour disputes in the US West

Coast ports, when many shippers

experienced significant cargo delays. The

Transatlantic Westbound trade lane hit

bottom at 41.1% in the beginning of

2015, followed by the second lowest

score of 44.0% in 2014-Q1.

Conclusion

In 2016 shippers experienced improving

schedule reliability in the major

East/West trade lanes, except for Asia-

North Europe and Asia-Mediterranean,

which saw their reliability scores slip by

7.8 and 0.4 percentage points to 79.4%

and 83.3% respectively.

At this point it is difficult to forecast the

direction of schedule reliability in 2017,

as the shipping industry will go through

several major changes which may impact

carriers’ on-time performances. It is

worth noting that new shipping alliances

will come into effect in April 2017 and

that could cause some confusion until

the service networks and vessel

schedules are fully aligned.

In 2016 all global shipping lines raised

their reliability scores compared to the

previous year. The title of most reliable

carrier went to Wan Hai with a score of

88.0%, recording a Y/Y increase of 6.5

percentage points. The second most

reliable carrier was Hamburg Süd with

86.6%.

It is clear that there are many variables

which impact schedule reliability in

general, yet we should bear in mind that

increasing cooperation between carriers

resulted in narrowing of the top18

carriers’ individual performances in

2016, and with the new alliances ad

greater liner consolidation may lead to

even less diversity in carrier schedule

reliability in the coming years.


12

January 2017 IMF world outlook update IMF projections for advanced economies have been upgraded, but

US protectionist policies bring uncertainty to the economic

forecast.

On January 16 the International

Monetary Fund (IMF) published their

update of the October 2016 World

Economic Outlook (WEO) report. In

October, advanced economies had been

downgraded compared to the previous

outlook in April 2016, with the US

economy showing weaker-than-

expected output in the first half of 2016.

Nevertheless, positive news for the

shipping industry were derived from the

expected slow recovery of the Russian

and Brazilian economies in 2017, as well

as the projected growth of China and

India.

Recent political developments have

placed an additional layer of uncertainty

over the shipping industry. US President

Donald Trump’s highly protectionist

policies brought serious concerns

throughout the shipping industry. The

withdrawal of the United States from the

Trans-Pacific Partnership (TTP) has

created uncertainty about the outlook

for the transpacific trade, as new

agreements will have to be discussed.

Moreover, the travel ban imposed by the

US President which suspends entry to

the US of citizens from seven

predominantly Muslim countries – Iran,

Iraq, Libya, Somalia, Sudan, Syria and

Yemen – could affect the shipping

industry. As reported in an article from

Lloyd’s List, it could have an impact on

crew changes at US ports, if vessels are

boarding crew members who are

nationals of any of the seven banned

countries.

In this week’s Sunday Spotlight, we take

a closer look at the main conclusions of

the latest IMF update, focusing on

trends affecting the container shipping

industry. Readers with a keen interest in

the underlying arguments and

conclusions can find the original report

and January update on the IMF website.

Methodology

It should be noted that these are

financial reports, meaning that global

trade growth is measured in monetary

terms rather than container volumes,

weights or quantities which would have

been more relevant for the container

shipping industry. Furthermore, both

services and goods are included in the

trade statistics, so the link to the

container trade is clearly not one-to-

one. However, a significant drop or rise


13

in world trade measured in monetary

terms will also manifest itself in terms of

actual volumes to be transported.

The IMF’s update is based on certain

assumptions and if they are not met the

economic outlook will be affected, with a

consequent impact on our projections

for the container shipping industry.

One of the first assumptions is the

policy changes that may be introduced

by the new US administration and the

spill-over impact this may have on the

global economy. As the report was

published few days prior to the

inauguration of Donald Trump as US

President, we may see a radical update

of the economic outlook in April.

Furthermore, the IMF bases its forecast

on the recent agreement among OPEC

members and other oil producing

countries to limit supply in order to raise

oil prices. The rise in oil prices - the IMF

predicts an increase of 19.9% in 2017 -

will naturally lead to an increase in

bunker oil prices as well. This in turn will

raise the cost levels for carriers,

although carriers’ revenues should

increase through higher BAF surcharges.

Nevertheless, as we have extensively

argued in issues 267, 269 and 284 of

the Sunday Spotlight, the natural BAF

time delay will lead to a significant cash

drain for carriers when bunker oil prices

rise.

Lastly, it is important to highlight that

the IMF pinpoints some risks to the

global growth outlook. The risk of

increased restrictions on global trades

and migration as a result of more

protectionist policies “would hurt

productivity and incomes”, says the IMF.

This is especially relevant for the

container shipping industry, as global

container trade growth hinges on the

free flow of goods among countries, so

highly protectionist policies are a threat

to the recovery of the industry.

Global economic developments

The IMF left their global growth estimate

for 2016 unchanged compared to the

October report, at 3.1%. As discussed in

the update, this growth rate was mainly

due to stronger-than-expected growth in

advanced economies, especially given

the reduction in inventory levels.

Looking at the estimate for 2016 across

the advanced economies, it was

influenced by a strong recovery of the

United States economy in the second

half of the year, after a weak beginning

to 2016. In the Euro area, Spain and UK

showed a stronger-than-predicted

economic growth in 2016. On the other

hand, the estimate for the emerging


14

market and developing economies has

shown a much different development.

Higher-than-expected growth was

experienced in China and Russia, but

weaker economic activity in countries

such as Argentina, Brazil and Turkey

affects the growth estimate for 2016.

Table C1 – Global Economic Outlook

2016 2017 2018

World Output

3.1% 3.4% 3.6%

AE 1.6% 1.9% 2.0% EMDE 4.1% 4.5% 4.8%

AE = Advanced economies. EMDE =

Emerging market and developing economies

The projections for global growth have

been left unchanged from the October

report at 3.4% in 2017 and 3.6% in

2018. This is definitely good news for

the container shipping industry as the

IMF expects economy activity in both

advanced and developing economies to

accelerate in the next two years.

The outlook for the advanced economies

been upgraded: they are now projected

to grow by 1.9% in 2017 and 2.0% in

2018. As the IMF puts it, “(..) the

forecast is particular uncertain in light of

the potential changes in the policy

stance of the United States under the

incoming administration”. Hence, a

scenario of stronger economy activity

and consequent potentially stronger

trade development is possible, though

with a slight concern on the impact that

the Trump administration’s potentially

protectionist policies might have. There

was positive news for the Asia-Europe

trade lane in a projection of increased

growth for Germany, Japan, Spain and

the UK, given a stronger-than-expected

activity at the end of 2016. Nonetheless,

growth rate forecasts were revised

downward for Italy and South Korea.

As the IMF discuss in their update, the

global growth forecast is mainly driven

by improvement in the EMDE

economies. The outlook for EMDE

economies is for growth of 4.5% in 2017

and 4.8% in 2018.

Table C2 – World trade volume

projections

2016 2017 2018

World 1.9% 3.8% 4.1%

AE 2.0% 3.6% 3.8%

EMDE 1.9% 4.0% 4.7%

Table C2 lists the IMF projections for

world trade volume in 2017 and 2018 as

well as the estimates for 2016.

The world trade outlook has been left

unchanged for 2017 compared to the

October report, and global trade growth

of 3.8% is still expected. On the other

hand, growth of 4.1% is now expected

in 2018, which corresponds to 0.1

percentage points lower than October.


15

Trade volumes for the Advanced

Economies have been downgraded by

0.1 and 0.3 percentage points for 2017

and 2018 respectively. That means that

the IMF now expects them to grow by

3.6% in 2017 and 3.8% in 2018.

For the emerging markets, on the other

hand, there is an opposite development

with trade volume projections for 2017

and 2018 being upgraded by 0.1 and

0.4 percentage points, respectively. The

IMF now expects these trade volumes to

grow by 4.0% in 2017 and 4.7% in

2018. It should be noted that the IMF

includes both services and goods in

international trade figures.

Nevertheless, a growth or decrease in

trade volume could translate into impact

for the container shipping industry, as it

could lead to lower or higher flows of

physical goods. The high projections for

emerging economies are definitely

positive news for the industry, as trades

to/from countries such as Brazil or India

would highly benefit from such growth.

Updates on individual countries

Table C3 shows IMF projections for the

main global economies.

As previously stated, the economic

outlook for the advanced economies was

upgraded by 0.1 and 0.2 percentage

points compared to the October WEO,

mainly driven by stronger-than-

expected economy activity at the end of

2016 in the US, Spain, UK and Japan.

Despite the high degree of uncertainty

about the future policies of President

Trump’s administration, the IMF has

revised its forecast upwards by 0.1 and

0.4 percentage points for 2017 and

2018, and is now forecasting growth

rates of 2.3% and 2.5% respectively for

the two years.

Table C3 – Economic projections for

major economies (%)

2016 2017 2018

US 1.6% 2.3% 2.5%

Germany 1.7% 1.5% 1.5%

Spain 3.2% 2.3% 2.1%

UK 2.0% 1.5% 1.4%

China 6.7% 6.5% 6.0%

Italy 0.9% 0.7% 0.8%

India 6.6% 7.2% 7.7%

Russia -0.6% 1.1% 1.2%

Brazil -3.5% 0.2% 1.5%

In the Euro area, Italy was downgraded

by 0.2 and 0.3 percentage points for

2017 and 2018 compared to the October

WEO. The Italian economy is now

expected to grow by 0.7% and 0.8% in

2017 and 2018, respectively. On the

other hand, the Spanish forecast has

been upgraded from the October WEO

by 0.1% percentage points for 2017 and

0.2 percentage points for 2018, which

should counterbalance the negative

development of the Italian economy for


16

the trades in and out of the

Mediterranean.

There may be positive news for the

Asia-Europe trade lane in the outlook for

the northern European economies.

Projections for Germany and UK have

been positively revised for 2017 given

their stronger-than-expected economic

activity at the end of 2016. The IMF

expects Russia to recover further and

grow by 1.1% in 2017 and 1.2% in

2018, partly driven by higher oil prices.

Looking at emerging and developing

economies, China and India are once

again the economies growing at the

fastest pace, which is extremely

interesting for the container shipping

industry development. The IMF expects

the Chinese economy to grow by 6.5%

in 2017, 0.3 percentage point above its

October WEO.

The IMF has downgraded its the forecast

for the Indian economy by 0.4

percentage points for 2017: it now

expects the country to grow by 7.2%.

The revision was mainly due to

temporary negative consumption. The

projection for the Indian economy to

grow by 7.7% in 2018 is remained

unchanged from the October WEO.

Lastly, the IMF update has negative

news for trades touching the East Coast

of South America. The Brazilian

economy has been downgraded by 0.3

percentage points for 2017 compared to

the October report, and is now expected

to grow by only 0.2%. The IMF expects

the Brazilian economy to pick up later in

2018 and grow by 1.5%.

Conclusion

The IMF update of the WEO report

shows that the global economy is

expected to keep growing throughout

2017 and 2018. This is mainly due to

the stronger-than-expected economy

activities in some advanced economies,

as well as stronger 2017 growth forecast

for China. Concerns have been posed by

the IMF especially on the impact that

the new administration in the US will

have on the global trades, as

protectionist policies are on the agenda

of President Trump.

On the positive side for the Asia-Europe

trade is the upgrade for the economic

growth forecasts in Germany, UK and

Spain. Moreover, the Russian economy

is expected to slowly recover in 2017

and 2018, which should have a positive

impact on the trade into both North

Europe and the Black Sea.


17

Carrier Service Changes CMA CGM to leave WAX 2 service

CMA CGM has announced that they will

stop offering the WAX 2 service from the

beginning of March 2017. The service is

operated by Maersk Line/Safmarine,

deploying 10 vessels with vessel capacity

ranging from 4,500 TEU to 5,400 TEU.

After CMA CGM’s departure the service

will still be operated by Maersk Line

(FEW5) and Safmarine (FW5). According

to CMA CGM schedules, the last vessel

“Christa Schulte” departed from Yantian

on 26th January.

The port rotation of WAX2/FEW5/FW5

service is as follows (10 port calls):

Yantian – Hong Kong – Nansha –

Singapore – Tanjung Pelepas – Walvis

Bay – Apapa – Tema – Cotonou –

Tanjung Pelepas and back to Yantian.

With CMA CGM’s departure from WAX2

service, the carrier will revise the port

rotation of three other African services –

WAX, WAX3 and AFEX. In the overview

below, we have underlined the port calls

that were added, while the ports calls

with a strikethrough have been removed.

As the carrier did not update their

schedules, we could not determine when

the first sailings will take place on the

revised port rotations. All three services

listed below each have 12 vessels

deployed with an average vessel size

from 4,350 to 4,500 TEU.

The port rotation of the WAX service will

be as follows (14 port calls):

Shanghai – Ningbo – Chiwan – Nansha –

Tanjung Pelepas – Singapore – Cape

Town – Walvis Bay – Cotonou –

Tincan/Lagos – Apapa – Abidjan –

Douala – Abidjan – Pointe Noire –

Colombo – Singapore – Shanghai.

The revised port rotation of WAX3 will

look as follows (12 port calls):

Xiamen – Shanghai – Ningbo – Nansha –

Singapore – Tanjung Pelepas – Cape

Town – Apapa – Tin Can/Lagos – Onne –

Apapa – Tanjung Pelepas – Xiamen

The vessels deployed on AFEX service

will call the following ports (11 port

calls):

Shanghai – Ningbo – Fuzhou – Nansha –

Singapore – Tanjung Pelepas – Lome –

Tema – Abidjan - Cotonou – Walvis Bay

– Tanjung Pelepas – Shanghai.


18

Carrier Rate Announcements


19


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23

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