o cean c arrier o utlook 2010/2011 november 18, 2010
TRANSCRIPT
OCEAN CARRIER OUTLOOK2010/2011
November 18, 2010
2008INCREASED CARRIER COSTS
• Carrier Fuel Costs Up 75%
• New ILWU Contract
• Inland Transport and Repositioning Costs
• Panama Canal Fees Rising
• Environmental and Security Initiatives
Source: TPM 2008
2008CARRIER RESPONSE
• Demand & Utilization Levels High Levels Still High.
• Rate Increases Sought.
• Vessels Re-Deployed
• New Vessel Sharing Arrangements
• “Slow Steaming” Source: TPM
2008
2009ECONOMIC DOWNTURN
• Inventories Slashed
• Decreased Demand
• Excess Capacity
• Rates Slashed In Most Lanes
• Top 10 Carriers Reported Losses of $11 Billion
2010RATE NEGOTIATIONS
• Revenue Recovery Above Customer Relations
• Carriers Uniquely Unified In Negotiation Strategy
• Rate Increases
• Capacity Reduced/The Singapore Parking Lot
• Increased “Slow Steaming”
• Inventory Rebuild
• The “New Economics” (Drewry Shipping)
2010/2011“NEW ECONOMICS”
• 2010 Rate/Volume Boom In Spite Of, Not Because Of, The Economy.
• Housing Market Stalled
• Unemployment High
• Retail Sales Unexciting
• Boom Over? Inventory Rebuild Over• Carriers Return To Profitability (JOC, Nov. 2010)
• Spot Rates Moving Down. (Drewry, Nov. 2010)
2011RATE ENVIRONMENT
Driving Rates Up
• Trade Growth
• Capacity Management
• Carrier Revenue Strategy
• Fuel Prices
• “New Economics”
Driving Rates Down• Weak Macro
Economics
• Early Peak Season End
• Added Capacity Trans Pac and Asia/Europe
• Carrier Vessel Order Book
• New/Niche Players
• Government Regulation?
Can The Carriers Continue To Manage The Supply-Demand Balancing Act??