dhl global forwarding, freight ocean freight market update€¦ · middle east: volatile market...

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OCEAN FREIGHT MARKET UPDATE

DHL Global Forwarding, Freight

August 2019

Publication Date 31st July 2019

Dominique von Orelli – Global Head, Ocean Freight

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Contents

TOPICS OF THE MONTH Emergency Risk Surcharge for the Strait of Hormuz

HIGH LEVEL DEVELOPMENT

MARKET OUTLOOK Freight Rates and Volume Development

ECONOMIC OUTLOOK & DEMAND DEVELOPMENT

CAPACITY DEVELOPMENT

CARRIERS

REGULATIONS

? DID YOU KNOW? MSC GÜLSÜN, first ‘Megamax-24’

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DHL Global Forwarding | OFR Market Update | August 2019

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Geopolitical tensions in the Gulf region

Recent developments in the Arabian and Persian Gulf Region resulting in increasing costs for shipping and logistic activities have led to drastic cost increases. As a result of recent maritime incidents when tankers were attacked near the Strait of Hormuz, ocean carriers have imposed surcharges due to increased operating cost. To continue our service level and assure the security of your supply chains, Danmar Lines is introducing an “Emergency Risk Surcharge” for the following Trading Areas: • USD 55/TEU and USD 3 W/M for all in/out Arabian and Persian Gulf • USD 110/TEU and USD 6 W/M for all cargo transshipped in Gulf ports • USD 150/TEU and USD 9 W/M for cargo destined to Yemen The surcharge has been implemented on July 15th, 2019 for all non-FMC and on August 1st, 2019 for FMC trades. We at DHL continue to monitor the development and stay in close contact with the ocean carriers. We appreciate your continued support and hope for your understanding.

Source: DHL

Topic of the Month Emergency Risk Surcharge for the Strait of Hormuz


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High Level Market Development – Supply and Demand

ECONOMIC OUTLOOK GDP GROWTH BY REGION1)

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1) real GDP, Global Insight, Copyright © IHS, Q2 2019 . All rights reserved. 2) Demand growth = Port-to-Port Container Traffic growth. Supply growth = Fleet Growth. Source: Drewry Maritime Research. 3) Drewry, in USD/40ft container, including BAF & THC both ends, 42 individual routes, excluding intra-Asia routes. 4) Shanghai Shipping Exchange, in USD/20ft container & USD/40ft ctnr for US routes, 15 routes from Shanghai. 5) Bunker Index, in USD/metric ton, Bunker Index MGO (BIX MGO) = avg. Global Bunker Price for marine gasoil (MGO) port prices; (BIX 380= avg. Global Bunker Price for all 380 centistoke (cSt) port prices; both index published on the Bunker Index website. 6) DHL Global Trade Barometer Jun19, index value represents weighted average of current growth and upcoming two months of trade, a value at 50 is considered neutral, expanding above 50, and shrinking below 50.

BUNKER PRICE INDEX5) WORLD CONTAINER INDEX (WCI)3) SHANGHAI CONTAINERIZED FREIGHT INDEX (SCFI)4)

DHL TRADE BAROMETER6)

3,000

1,000

500

0

1,500

2,000

2,500

Q3 Q1 ’18

Q4 Q2 Q1 ’19

Q3 Q2 Q4

800

600

400

500

700

900

1,100

1,000

1,200

Q2 Q3 Q1 ’18

Q2 Q4 Q1 ’19

Q4 Q3

800

0

200

400

600

1,000

Q4 Q1 ’18

Q3 Q2 Q3 Q1 ’19

Q2 Q4

30

35

40

45

50

55

60

65

70

75

Q2 Q1 ’17

Q3 Q4 Q4 Q3 Q2 Q1 ’18

Q1 ’19

Q2

Ocean

Global

Actual

Forecast

Actual

Forecast

SUPPLY/DEMAND GROWTH (ANNUALIZED), IN % 2)

Supply Growth %

Demand Growth

%

0%

1%

2%

3%

4%

5%

6%

2018 2019F 2020F 2021F 2022F 2023F

SUPPLY/DEMAND GROWTH (ANNUALIZED), IN % 2)


Jun19 index

predicts Jun-

Aug19 trade

development

BIX 380

BIX MGO

2019F 2020F 2021F 2022F 2023F CAGR

(2020-23)

EURO 1.4% 1.3% 1.5% 1.6% 1.6% 1.6%

MEA 2.1% 2.9% 3.0% 3.2% 3.4% 3.2%

AMER 2.4% 2.1% 1.8% 1.6% 1.6% 1.7%

ASPA 4.5% 4.5% 4.5% 4.6% 4.6% 4.5%

DGF World 2.9% 2.8% 2.8% 2.8% 2.8% 2.8%

Carriers will start bunkering

IMO 2020 compliant fuel as of

Q4 ’19. Implications on

bunker & BAF prices not

known yet.

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Market Outlook August 2019 – Major Trades

Carriers are announcing GRIs out of ASPA in view of the expected cargo rush before Chinese Golden week

KEY Strong

Increase ++

Moderate Increase

+ No

Change =

Moderate Decline

- Strong Decline

- -

EXPORT REGION IMPORT REGION CAPACITY RATE

EURO AMNO = =

AMLA = =

ASPA - -/=

MENAT - -/=

SSA = =

AMNO AMLA = =

ASPA = =

EURO = =

MENAT = =

SSA = =

EXPORT REGION IMPORT REGION CAPACITY RATE

AMLA AMNO = =

ASPA = =

EURO = =

MENAT = =

SSA = =

ASPA ASPA - =/+

AMNO + =

AMLA = +

EURO - +

MENAT = +

OCEANIA - +


Source: DGF

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Market Outlook August 2019 – Ocean Freight Rates Major Trades Market outlook on smaller trades available in the back-up

O C E A N F R E I G H T R A T E S O U T L O O K

ASPA – EURO The extensive blank sailing program from Ocean alliance and The alliance is in full swing and carriers are announcing a new round of GRI for 1st August.

EURO – ASPA & MEA Additional blank sailings, combined with strong commodity demand put pressure on space and container availability. Space situation continues to be tight. Long term rate agreements remain stable.

ASPA – AMLA Utilization/outlook remains strong especially to ECSA. Spot rate are likely to uptrend due to anticipated commencement of peak season.

ASPA – AMNO 3 extra loaders to be deployed 1st half of Aug so we do anticipate some market rate pressure. USEC utilization continue to be tight due to panama limitation even though there have been some improvement in July.

EURO – AMNO Tight space situation unchanged.

ASPA – MENAT

MIDDLE EAST: Volatile market into Middle East AFRICA: Market remains flat and with no big changes; Overall space is still at the manageable level Carriers have also implemented WRS into Middle East / Red Sea region with effective July 2019, with no exception/waiver to any NAC or FAK bookings.

ASPA – ASPA The cargo rush is expected from mid-AUG, with the approaching Chinese Golden week. Rollings at transshipment port on the Indian Subcontinent trade have eased a little but may worsen again with the rush. Heavy rains and floods in South Asia have further affected port productivity and operations in Chittagong. Further delays are to be expected.

AMNO – EURO FAK rates are being extended through end of Q3. There will be no change in August . The TAEB remains flat over the summer.


Source: DGF

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Economic Outlook & Demand Development The global economic outlook: An ongoing slowdown

Source: IHS Markit, IHS Purchasing Manager Index Manufacturing, a PMI at 50 is considered neutral, expanding above 50, and business shrinking below 50.


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EURO

EURO economies remain fragile. There seems to be no end to the bad news from the manufacturing & banking sectors. Retail sales, industrial production, exports, & construction output all point to slower growth. Real GDP growth is projected to slow from 1.9% in 2018 to 1.0% this year. Struggling manufacturing and weakening PMIs are also evident in the UK economy. On top of that, the risks of a “no-deal” Brexit have risen. Real GDP growth is projected to slow form 1.4% in 2018 to 1.1% this year.

AMNO IHS Markit forecasts an immediate GDP growth stepdown in the US to an annual rate of 1.9% averaged across the final three quarters of 2019. The stepdown reflects an unwinding of temporary factors that were boosting growth in recent quarters, including diminishing support from fiscal stimulus & a sharp slowing in the pace of inventory building from unsustainable levels in recent quarters.

ASPA

Deteriorating net exports & inventory destocking likely limited real GDP growth in Q2 in JP. IHS Markit has raised this year’s growth rate by 0.1 percentage point, reflecting stronger recent data through May. Real GDP growth in CN slowed in Q2 to 6.2%, driven by the industry & construction sector where growth eased to 5.6% YoY from 6.1%. In June, an upturn in the automotive industry supported accelerations in retail sales, industrial production, & fixed investment; but the moment looks unsustainable. More aggressive policy stimulus is expected in H2.

EMERGING MARKETS

Exports from Asia’s key emerging & advanced countries have taken hits in H1 ’19. Early on, there was a sense that some economies, such as VN, would benefit from the CN-US conflict as companies looked for other suppliers. However, this perceptions has recently invoked the ire of the White House, which has imposed 400% tariffs on the imports of steel from VN and threatened to do much more. In response, the VN government has raised tariffs on imports from CN to limit transshipments to the US via VN.

DEMAND DEVELOPMENT

Worldwide PMI surveys indicate a deterioration of manufacturing business conditions for a 2nd successive month, with the headline JPMorgan Global Manufacturing PMI, falling from 49.8 in May to 49.4 in June, its lowest level since Oct 2012. Output, new orders, exports, inventories, back logs of work, & employment all fell during the month.

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Capacity Development 1/2

C A P A C I T Y

The idle containership fleet has risen to 118 units for 371’680 TEU as at 8 July, with a steady stream of ships entering shipyards for scrubber retrofits pushing up the idle numbers. Demand for extra loaders especially in the transpacific route in the coming weeks is expected to keep the ships above 4’000 TEU busy for the time being, but the summer peak season demand has so far failed to filter down to the smaller sizes with idle numbers staying stubbornly high.

The OCEAN Alliance will void 4 Asia-North Europe sailings in July & August. The cancellations will remove 66’900 TEU from the trade over the 4 affected weeks. This follows THE Alliance’s announcement to 4 void sailings on the route in July for a removal of 67’700 TEU. Although the blank sailings announced so far will cap the capacity growth in the coming weeks, the weekly capacity to North Europe will still be % higher in August compared to a year ago.

The OCEAN Alliance carriers (COSCO-OOCL, CMA CGM-APL) and Evergreen have announced a revision of their joint Far East-North Europe services ‘NEU4’ & ‘NEU5’ in July. Both services are operated by CMA CGM.

CMA CGM will maintain a USEC-WCSA service by transhipment in replacement of the direct service offered so far through slots on the USEC-WCSA joint service operated by Hamburg Süd/Maersk and Hapag-Lloyd. MSC has replaced its WCSA-USEC direct service (via the Philadelphia gateway), a segment of the wider Europe-NCSA-WCSA service by a transhipment service hubbing at Freeeport (Bahamas), using the current 'Florida Express' service which is extended to Philadelphia. A 4th week and 4th ship is added to the rotation to cater for the longer rotation.

Throughout July, COSCO, Maersk & MSC will continue to add ‘extra loaders’ to services on the TP route. Most of the planned extra loaders are to serve the US East Coast and US Gulf, where vessel capacity on existing loops had to be reduced due to recent draft restrictions in the Panama Canal. COSCO will add a peak season transpacific extra loader service in Aug connecting Hong Kong, Yantian, Long Beach in anticipation of stronger volumes in the coming weeks. 3 sailings are currently scheduled in the first 3 weeks of August.

Zim is to strengthen its Asia-US partnership with the 2M partners by joining them on the Far East-US Gulf route. The 3 carriers will jointly offer from Aug two weekly Far East-US Gulf services that will offer an aggregate capacity of 10’000 -11’000 weekly TEU. One of these focuses on Central China & KR, while the other will be centered on South China & KR. The two new 2M-Zim loops will cover the same ports as the current 2M service, together with new direct calls at Tampa & Miami. For 2M, the split will allow better transit times on certain port pairs while for Zim, the new services will fill a gap in its direct Far-East-Us coverage. The new arrangement is an extension of the strategic cooperation agreement conclude d in Jul ’18 between 2M and Zim on the Asia-US East Coast trade.


Source: Alphaliner, Dynaliners, carriers

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Capacity Development 2/2

C A P A C I T Y

MSC deploys extra loaders to combat Durban congestion. In a customer advisory, MSC said that cargo from Durban & from Ngqura (Koega) to Europe would be loaded as usual on ships of its South African-Europe service, but that the vessels would skip the normal Cape Town call to make up for lost time. Connections from Cape Town to Europe will be maintain by dedicated extra sailers on the route, starting immediately.

MSC will extend its Far East - Middle East 'Falcon‘ service to North China with an additional call at Qingdao. The revised ‘Falcon’ service will cover Qingdao, Shanghai, Ningbo, Shekou, Singapore, Colombo, Jebel Ali, Abu Dhabi (Mina Khalifa), Hamad, Dammam, Umm Qasr, Qingdao. MSC continues to advertise a rotation of 7 weeks, using 7ships of 8’500 – 9’500 TEU. This extension is scheduled to take effect from 27 July from Qingdao. The extended ‘Falcon’ service will enable MSC to offer a direct and faster connection between North China through Qingdao and the Middle East, where it provides direct calls at Hamad, Dammam & Umm Qasr on top of the Jebel Ali hub.

Hamburg Süd (Maersk Group), ANL (CMA CGM Group) and Hapag-Lloyd will improve the reliability of their joint service connecting USWC with AU, NZ, & South Pacific Islands. Turnaround time will be extended from 8 weeks to 9 weeks and one more vessel to maintain the weekly frequency.

2M is to replace the Miami call by a New York call on their Far East - USEC 'TP-16/Emerald' service, effective with the 12 Aug sailing of the MAERSK SYDNEY from Xiamen, with the first New York call planned on 26 Sep ‘19. Miami will continue to be covered directly with the new version of the 'TP-18/Lone Star' service, launched in Aug.

Hapag-Lloyd, COSCO and its sister company OOCL, ONE and Yang Ming will launch in Oct a new weekly service between East India, South India, the Mediterranean & North Europe, branded 'IEX' by Hapag-Lloyd, COSCO and Yang Ming, 'IP3' by OOCL and 'IO3‘ by ONE. It will turn in nine weeks using 9 ships of 6’500 TEU, 4 of which to be contributed by Hapag-Lloyd. The fleet contribution of the other partners has yet to be announced. It is expected to kick off from Visakhapatnam on 26 Oct. This service will be the first ever full container link connecting directly the East & South India ports of Visakhapatnam, Krishnapatnam & Tuticorin with Europe.

After having sustained major structural damage in a fire on 6 Mar ‘18, Maersk Line's 15’282 TEU container vessel MAERSK HONAM is set to return back to service under a new name. Following initial works at Dubai, a spectacular transport to South Korea, and extensive repairs at her building yard, Hyundai Heavy Industries in Ulsan, the refurbished vessel will soon return to active service as the MAERSK HALIFAX.



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C A R R I E R S

HMM will join THE Alliance as a full member from 1 Apr 2020. As per the same date, HMM will terminate its partnership with the 2M alliance at the expiry of the current 3-year cooperation agreement. 2M’s refusal to grant HMM full membership status was a key factor in the carrier’s decision to seek new partners. HMM’s participation is expected to add some 34 ships with a total capacity of 519’000 TEU, based on the deployment plans that HMM had announced earlier this year. This will narrow the capacity gap between THE Alliance and its two rivals OCEAN Alliance and 2M. THE Alliance’s share of vessel capacity deployed on global alliances’ services will increase from 25% to 30%.

Cosco Shipping will install scrubbers on 23 containerships to comply with upcoming 2020 IMO regulations on sulphur emissions. CSIC No.711 Institute will supply scrubber systems for five 18’980 TEU CSCL GLOBE'-class vessels and for COSCO’s eight 14’074 TEU 'CSCL STAR'-class vessels, while Finnish company Valmet will supply scrubbers for ten 4’250 TEU ships. Valmet says that the scrubbers will be installed in Chinese yards in 2019. In addition, the 13’208 TEU OOCL SINGAPORE is currently undergoing retrofitting at CSBC Kaohsiung in a pilot scrubber project for OOCL. These latest deals bring the total number of scrubbers ordered for installation on containerships to over 870 units, based on Alphaliner’s latest estimates.

11 major banks have established the so-called Poseidon Principles, to reduce the carbon footprint of their shipping portfolios. They control a shipping loan portfolio of more than US$ 100 bn, around 20-25% of all shipping loans.

In anticipation of Brexit, CMA CGM has moved 49 vessels away from the British register since 2016 and transferred them to France & Malta.

Carriers

Source: Alphaliner, carriers


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Carrier Mergers, Acquisitions and Alliances

M E R G E R S A N D A Q U I S I T I O N S

China

Shipping Cosco OOCL Evergreen APL

CMA

CGM Hapag

Lloyd

United

Arab

Shipping

Hyundai

Merchant

Marine

Hamburg

Süd Maersk

Line MSC K Line MOL NYK

Yang

Ming

CHINA COSCO SHIPPING

OOCL EVER

GREEN CMA CGM

APL HAPAG-LLOYD

HYUNDAI

MERCHANT

MARINE

MAERSK LINE

Hamburg Süd MSC

OCEAN NETWORK

EXPRESS (ONE) YANG

MING

A L L I A N C E S

F O R M E R A L L I A N C E S P R E S E N T A L L I A N C E S

2M MAERSK LINE

MSC OCEAN 3

CMA CGM

CHINA SHIPPING

UNITED ARAB

SHIPPING COMPANY

2M MAERSK LINE

MSC

OCEAN

ALLIANCE

OOCL

CMA CGM

CHINA COSCO SHIPPING

EVERGREEN

G6

HAPAG-LLOYD

MOL

NYK

APL

HYUNDAI

MERCHANT

MARINE

OOCL

CKYHE

COSCO

EVERGREEN

HANJIN

SHPPING

K-LINE

YANG MING THE ALLIANCE

HAPAG-LLOYD

ONE

YANG MING

HMM (from 1 April

2020) *Source: Carriers

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R E G U L A T I O N S

Germany: New Customs Regulations for Harmonized System (HS) Codes for Imports to Germany With immediate effect, the German Customs Authorities now mandates the 4 digit Harmonized System (HS) code of goods along with the detailed goods description of each different type of goods for every shipment. In summary: • Individual HS codes must be recorded for each commodity (first four digits of the commodity number) • Collective registrations in one item are not allowed. • General terms such as courier freight, general cargo, parts or collective designations (Consolidation) are not permitted. • Incomplete collection of goods in one item is also not permitted.

Bangladesh: Advance Cargo Manifest (ACM) Submission for Import Shipments Effective 01 July 2019, all shipping agents and airlines are now required to submit the ACM. The National Board of Revenue mandates the following guidelines: • Submission of complete Electronic Manifest (Cargo) with all relevant information and coordinated data as contained in both MBL and HBL must be submitted by the

carrier before leaving the last port of call. • All carriers (freight forwarder, shipping line, Non-Vessel Operating Common Carrier (NVOCC) and so on must submit the advance manifest to customs. DGF Bangladesh (BD) as the agent of DANMAR LINES is responsible for submitting the advance manifest to customs. This process is going to be trail basis for one month. Hence, cargos in transit will be exempted. After a month this will be mandatory.

India: New Customs Regulation for Sea Cargo Manifest and Transhipments (SCMT) On 01 August 2019, the new Sea Cargo Manifest and Transshipment (SCMT) regulation is expected to go live in India. The new regulation affects the current Import General Manifest (IGM) and Export General Manifest (EGM) procedures. This new regulation is a soft go-live and has a transition period of 45 days, that is until 14 Sep ’19.

Bangladesh: Criteria for Less Than Container Load (LCL) Import Shipments As per directive of the Chittagong Port Authority (CPA), LCL shipment shall consist the following criteria: • The maximum weight of the unit shall not exceed more than 5 metric ton. The length of the unit shall not exceed more than 10 feet. • If shipment exceeds the above limit, it shall be treated as Full Container Load (FCL). In case of such deviation, fine and penalty will also be imposed

Regulations

Source: Alphaliner, carriers


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Source: DHL, carriers

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South Korea shipyard Samsung Heavy Industries delivered on 4 July ‘19 the 22’500+ TEU container vessel MSC Gülsün, the first ‘Megamax-24’ vessel in the world. The new type is one container row wider than the most recent ‘megamax-23’ and features a beam of 61.50 m against a ‘megamax-23’ beam of 58.60-59.00 m while the length remains at 400m similar to ‘MGX-23’ . The added breadth gives the new generation an additional intake of 1’000 to 1’500 TEU, depending upon the individual vessel design. So far 32 ‘MGX-24’ have been ordered: • 12 units for HMM • 11 units for MSC • 9 units for CMA CGM

On 18 Jul ’19 South Korean shipyard Daewoo Shipbuilding & Marine Engineering delivered the megamax-24 type container vessel MSC MINA with a reported capacity of 23’656 TEU. Thus stealing the record in terms of nominal intake from the MSC Gülsün.

Source: Alphaliner

Did you know? MSC GÜLSÜN, first ‘Megamax-24’


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B A C K - U P

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Source: DGF

Market Outlook August 2019 – Ocean Freight Rates Additional Trades (1/2)


EURO – AMLA Rates and capacity remain stable

EURO – MENAT ME region shows same trend as ASPA; Additional blank sailings, combined with strong commodity demand put pressure on space and container availability. Space situation continues to be tight.

EURO – SSA Rates remain stable. Congestion due to strike actions in South Africa (mainly in Coega) shall recover soon. Cargo backlog still persists. All South African ports are suffering with operational issues due to weather conditions, failure of cranes/equipment and structural issues

AMNO – MENAT Rates in the market are stable. Space continued to be tight out of USEC & USGC Ports on services to M.East & India Subcontinent. July-August bookings are 2-3 weeks out from USEC and 2 weeks out from Houston. No issues out of USWC.

AMNO – SSA Rates to South Africa and West Africa remained unchanged since the beginning of 2nd Qtr. No changes in capacity. Space is available.

AMNO – AMLA Soft market US to AMLA. Gulf resin/chemicals shipments increasing. Low Sulphur surcharge still not fully determined value of pending cost. Services re organized and back to normalcy.

AMLA Exports Equipment imbalance affecting drop off conditions in CO & CL Inland haulage costs in MX & GT increasing due to security reasons Congestion continues at all t/shipment ports in Central America

AMNO – ASPA Rates are stable. Bunker component will be broken out of ocean base by Q3 for those carriers who have not adjusted the traditional all-inclusive pricing.


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Market Outlook August 2019 – Ocean Freight Rates Additional Trades (2/2)


EURO MED - AMNO Rates will remain stable until end of September at least

EURO MED – AMLA Unchanged / stable. Nothing to be highlighted

EURO MED – ASPA Unchanged / stable. Nothing to be highlighted

EURO MED – MENAT Unchanged / stable. Nothing to be highlighted

EURO MED – SSA Unchanged / stable. Nothing to be highlighted

ASPA-SPAC In view of the capacity reduction and steady recovery of the market, carriers have implemented GRI on 1st Aug to anticipate the crowning of the peak season for 2019.


Source: DGF

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Market Outlook – Volume Outlook in Main Trade Lanes, 2019 Estimate & 2020/23 Growth Forecast in %

N O R T H

A M E R I C A I n c l .

M E X I C O

4.3 mTEU +2.2%

2.3 mTEU +1.5%

1.7 mTEU +3.4%

0.4 mTEU +4.4%

N O R T H

A M E R I C A I n c l .

M E X I C O

L A T I N

A M E R I C A

E U R O P E

I n c l . M E D

14.6 mTEU +3.8%

7.3 mTEU +2.2%

7.6 mTEU +3.0%

18.5 mTEU +3.4%

1.7 mTEU +4.0%

4.4 mTEU +4.8%

2019e, in mTEU 2020e-2023e CAGR, in %

F A R E A S T

I N T R A A S I A

excl. Oceania

40.7 mTEU +3.8%

2.0 mTEU

+3.9%

1.5 mTEU

+3.0%

L A T I N

A M E R I C A

G L O B A L C O N T A I N E R T R A D E 2 0 1 9 e 1 5 1 . 2 m T E U + 3 . 9 % C A G R 2 0 2 0 e - 2 0 2 3 e

Mid-term growth is mainly driven by Asian tradelanes.

Source: Seabury Jun19 update


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Carrier Financial Results 2018, as at 24 May 2019


Source: Alphaliner, DynaLiners; n.a. = not available, n.m. = not meaningful, 1) local currency numbers were converted into US$ using the average exchange rate for relevant financial period, 2) CMA CGM include NOL/APL, 3) results are full Japanese

financial year, i.e. Apr18-Mar19, not calendar year, 4) operating profit is “Core EBIT”, 4 May 17, 7) including Hamburg Sued from 1 Dec 17, 6) operating profit is EBITDA, 7) Average excluding ONE, 10) incl. OOCL from 7 Aug 18, 11) excl. Long Beach

Container Terminal in 2018 & real estate investments

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CARRIER FINANCIAL RESULTS FULL YEAR 2017-18 (US$ MILLION) Revenue Operating Profit Operating Profit Margin Net Profit

Carrier 2017 2018 % 2017 2018 % 2017 2018 2017 2018 %

Maersk (Ocean business) 5), 6) 22'023 28'366 29% 2'777 3'007 8% 12.6% 10.6% n.a. n.a. n.a.

CMA CGM 2), 4) 21'116 23'476 11% 1'575 610 -61% 7.5% 2.6% 701 34 -95%

COSCO SHIPPING Holdings 1), 5), 8) 12'814 17'376 36% 267 342 28% 2.1% 2.0% 264 252 -5%

Hapag-Lloyd 1), 5), 6) 13'414 15'583 16% 1'419 1'540 8% 10.6% 9.9% 44 63 43%

OOCL (container transport & logistics) 5), 9) 6'078 6'547 8% 105 210 100% 1.7% 3.2% -12 55 558%

Evergreen Marine Corp. 1), 5) 4'933 5'626 14% 223 6 -97% 4.5% 0.1% 229 10 -96%

Yang Ming 1), 5) 4'294 4'715 10% 17 -191 -1236% 0.4% -4.0% 11 -219 -2184%

ONE 3) n.a. 8'054 n.m. n.a. n.a. n.m. n.a. n.m. n.a. -491 n.m.

Zim 5) 2'978 3'248 9% 162 34 -79% 5.4% 1.0% 6 -126 -2200%

Wan Hai 1) 2'045 2'182 7% 106 32 -70% 5.2% 1.5% 86 37 -57%

HMM (container shipping business 1), 5) 3.9 4.2 8% -0.28 -0.45 62% -7.2% -10.8% n.a. n.a. n.a.

Average 7) 89'700.1 107'124.3 19% 6'650.2 5'589.2 -16% 7.4% 5.2% 1'328.8 105.1 -92%

Only six of the 11 top carriers who publish their financial results ended in the black, often with marginal net profits.

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Acronyms and Explanations

AMLA - Latin America OWS - Overweight Surcharge

AMNO - North America PH - Philippines

AR - Argentina PNW - Pacific North West

ASPA - AsiaPacific Ppt. - Percentage points

BR - Brazil PSW - Pacific South West

CAGR - Compound Annual Growth Rate SAEC - South America East Coast

CENAC - Central Amercia and Caribbean SAWC - South America West Coast

CNC - CNC Line (Cheng Lie Navigation Co. Ltd.) SOLAS - Safety of Life at Sea

DG - Dangerous Goods SPRC - South People’s Republic of China – South China

DWT - Dead Weight Tonnage SSA - Sub-Saharan Africa

EB - Eastbound SSL - Steam Ship Line

ECSA - East Coast South America (synonym for SAEC) T - Thousands

EGLV - Evergreen Marine Corp TEU - Twenty foot equivalent unit (20‘ container)

EURO - Europe TSA - Trans Pacific Stabilization Agreement

GRI - General Rate Increase USGC - US Gulf Coast

HMM - Hyundai US FMC - US Federal Maritime Commission

HL - Hapag-Lloyd USEC - US East Coast

HSUD - Hamburg Süd USWC - US West Coast

HWS - Heavy Weight Surcharge VGM - Verified Gross Mass

IA - Intra Asia VLCS - Very Large Container Ship

IPBC - India Pakistan Bangladesh Ceylon (= Sri Lanka) VSA - Vessel Sharing Agreement

IPI - Inland Point Intermodal WB - Westbound

ISC - Indian Sub Continent (synonym for IPBC) WCSA - West Coast South America (synonym for SAWC)

MENAT - Middle East and North Africa WHL - Wan Hai

ML - Maersk Line WRS - War Risk Surcharge

mn - Millions YML - Yang Ming Line

MoM - Month-on-Month YoY - Year-on-Year

NOO - Non-operating (vessel) owners YTD - Year-to-Date

OCRS - Operational Cost Recovery surcharge

OOCL - Orient Overseas Container Line


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