From FreightWaves, March 26:
The new market outlook of U.K.-based consultancy Maritime Strategies
International (MSI) reads like a Stephen King novel geared toward
container-line executives. It’s not exactly feel-good reading for cargo
shippers either. Cheap freight rates are only attractive if they don’t
trigger another Hanjin Shipping-style bankruptcy.
“The near-term outlook for the container-ship industry has deteriorated rapidly
following the spread of COVID-19 cases worldwide and subsequent efforts
to limit the number of deaths and cases,” warned MSI in its monthly
outlook released Thursday.
“There seems little doubt that containerized trade will shrink in
2020, with near-term rates of decline potentially approximating — or
even exceeding — those seen during the financial crisis,” it said.
Mainline trades
In the mainline east-west trades (trans-Pacific, Asia-Europe), MSI
sees “extraordinary downward pressure given a looming collapse in
consumer spending in Europe and increasingly, North America.” It cited
“near-unprecedented headwinds” for European imports, with the
trans-Pacific to face the same shock as the Asia-Europe lane, but with a
lag.
“While liftings data from March should remain reasonably positive,
thereafter it will become a question of ‘how bad can it get?’” said MSI,
which believes the full-year 2020 slump won’t be as severe as 2009’s
but that the second quarter of 2020 could match financial-crisis-era
lows.
The consultancy projects that the total volume in March-May will fall
17.8% year-on-year on the Asia-Europe route, 15% on the trans-Pacific
(U.S. West Coast) route and 13% on the trans-Pacific (U.S. East Coast)
route.
Non-mainline trades
“There is no trade that will escape the impact of the COVID 19 global
recession,” stressed MSI, which noted that non-mainline trades are
highly exposed due to capital flight from emerging markets, the surge in
the value of the U.S. dollar and sliding commodity prices....MORE
