Thursday, May 30, 2019

Economy/Shipping: "Maersk Warns Trade Tensions are Hurting Shipping’s Growth"

Two via gCaptain. First up, Reuters May 24:
A.P. Moller-Maersk , the world’s largest container shipping company, warned on Friday that trade tensions and an economic slowdown are slowing growth in global freight.

Maersk, which is seen as an indicator of global trade patterns, cut its forecast for global growth in container traffic this year due to the trade dispute between the United States and China.
“The recent escalation of the trade war induced by an increase in tariff rates and threats of implementing additional tariffs could take global container trade growth to the lower end of the 1-3% interval (range),” CEO Chief Executive Soren Skou said, referring to a forecast range it had given three months ago.

During his three years as CEO, Skou has sold off the Danish group’s oil and gas business to focus on the container business, a strategy some analysts say has left Maersk exposed during economic downturns.
The strategy was initially welcomed by investors, but Maersk’s share price has fallen 42% since a peak in July 2017 and is now virtually trading where it was when Skou took on the job in June 2016.
On Friday the group reported first-quarter results in line with expectations as a decline in container volumes was balanced by higher freight rates.
The trade war depressed trade volumes between Asia and North America in the first three months of the year, it said.

New tariffs could reduce the expected growth in global container volumes by up to 1 percentage point, Skou told a press conference in Copenhagen after returning from a trip to China.
“We hosted 50 Chinese customers for dinner in Shanghai yesterday and I can assure you that they all wanted the trade war to end soon,” Skou said....

And The Loadstar, May 24:

Carriers Blank More Sailings as Transpacific Box Rates Continue to Slide
A blanked sailing from the 2M+HMM grouping on the transpacific this week failed to halt the further erosion of freight rates to both the Asia-US west coast and Asia-US east coast destinations.
The departure of the 8,500 teu Hyundai Faith, scheduled for this week, was cancelled “to rationalise capacity supply from Asia to the US west coast”, according to vessel-sharing agreement partner MSC.
The blanking was on the MSC Yulan service connecting Shanghai, Gwangyang and Busan with Los Angeles.

However, the capacity cut failed to push up rates, which this week saw further declines on the transpacific, according to multiple indices.
The Shanghai Containerised Freight Index (SCFI) recorded a 3.4% on the Shanghai-US west coast leg to $1,294 per 40ft, while the Shanghai-US east coast leg saw rates drop 2.2% to $2,450 per 40ft.
The Freightos Baltic Index broadly concurred with the SCFI assessment. Yesterday, it put the China-US west coast rate at $1,315 per 40ft, and noted that rates had jumped 24% at the beginning of April following a general rate increase (GRI) to $1,555 per 40ft, but “they’ve been dropping ever since”, it reported.....