Shipping: "Box Carriers Gaining from Oil Price Slump, Brexit and Robust Rates"

As China slows those rates will have to come down regardless of what happens on the tariff front.
The big container companies are planning ways to mitigate the industry overcapacity that is already baked in.

First up, The Loadstar via gCaptain with the good news, January 18:

Today’s Shanghai Containerized Freight Index (SCFI) shows a marginal decline in spot rates to North Europe, but there was a jump in rates for the North American market, which is good news for ocean carriers just weeks before new annual transpacific contract negotiations commence.

The SCFI recorded a 0.9% fall in spot rates from Asia to North Europe to $970 per teu, while rates to Mediterranean ports were virtually flat at $978 per teu.

In the same week 12 months ago, spot rates on the two European lanes stood at $891 and $761 per teu respectively, for North Europe and the Mediterranean, suggesting there is a more robust market this year prior to the Chinese New Year, particularly for the Mediterranean.

However, the backhaul trade from North Europe to Asia continues to be depressed as a consequence of China’s restrictions on the import of waste paper and plastics.
Indeed, according to the latest reading from Drewry’s World Container Index (WCI), spot rates from Rotterdam to Shanghai are at a lowly $576 per 40ft, 34% below the level of a year ago.

George Griffiths, editor global container freight market at S&P Global Platts, said “concerns remain over Brexit” and with the 29 March deadline for leaving the European Union creeping closer, UK retailers were ensuring they had ample stock to overcome a possible period of disruption to supply chains....MORE

And from World Maritime News, Jan. 21:

Drewry: Carriers to Mitigate ULCV Impact by Delaying Deliveries 

Carriers would be able to mitigate the capacity inflation of the ultra large container vessels (ULCVs) scheduled to arrive over the next few years by delaying deliveries and slowing services, shipping consultancy Drewry said.

A total of 26 containerships of at least 18,000 TEU were delivered to carriers in 2018, the most since ULCVs first hit the water in 2013. All of these ships, with an aggregated capacity of 525,500 TEU, were deployed in the Asia-North Europe trade.

The current orderbook schedule calls for a slightly less punishing deluge of 460,000 TEU this year, followed by 620,000 TEU in 2020, marking another record haul.

“While it is true that accommodating such large tranches of new capacity will be challenging, especially as the Asia-North Europe trade is in a slow-growth phase, there are reasons to believe that the task will not be as onerous as it initially appears,” according to Drewry.

Firstly, it is common that the annual delivery schedules are adjusted downwards in time therefore it is highly unlikely that all of the ULCVs scheduled for the next two years would arrive as originally planned with many being pushed into following years.

Additionally, just because a new ship enters a trade it does not automatically follow that the net capacity of the route increases...MORE