Statistical Publications

Institute of Shipping Economics and Logistics

Shipping Statisticsand Market Review

Market ReviewAnalytical Focus

Volume 56 No 5/6 - 2012

World Merchant Fleet

World Bulk Carrier MarketWorld Tanker Market

World Container and General Cargo ShippingWorld Merchant Fleet by Ownership PatternsWorld Passenger and Cruise Shipping/ISL Cruise Fleet RegisterWorld Shipbuilding and ShipbuildersMajor Shipping NationsWorld Seaborne Trade and World Port Traffic

ISL Institute of Shipping Economics and Logistics, Bremen, 2012

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Comment - World Container and General Cargo Shipping

SSMR May/June 2012

www.isl.org

This short comment is an excerpt from the Analytical Comment published in the ISL Shipping Statistics and Market Review (SSMR) No 5/6 2012. The SSMR includes detailed statistical information concerning the analytical focus and provides approx. 30 monthly/quarterly market indicators (Market Review). For more information compare attached contents

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Contents World Container and General Cargo Shipping www.isl.org

SSMR May/June 2012 3

Page

ISL Comment

(1) WORLD CONTAINER AND GENERAL CARGO FLEET DEVELOPMENT 2011/2012

1.1 World Cellular Container Fleet .................................................................... 5 1.2 World General Cargo Fleet ......................................................................... 8

(2) FUNDAMENTALS OF THE CONTAINER AND GENERAL CARGO MARKET

2.1 Major World Trade Developments 2011/2012 .............................................. 10 2.2 Global Insight Short Term Container Trade Outlook ................................... 11 2.3. World Container Port Traffic Regional Highlights 2011 ................................ 11 2.4. The Container Market - Rates and Prices ..................................................... 12

(3) FUTURE CONTAINER AND GENERAL CARGO TONNAGE SUPPLY .................................................................. 14

(4) THE SHIPBUILDING MARKET FOR CONTAINER AND GENERAL CARGO SHIPS

4.1 New Orders and Order Book Development ................................................... 14 4.2 Leading Shipbuilding Countries .................................................................. 15

COMMENT - SUMMARY TABLES

Tab. 1 World Container Fleet Additions/Reductions 2006, 2010 and 2011 .............................. 5 Tab. 2 World Fully Cellular Container Fleet and Order Book by TEU-Size Class 2012 .................. 6 Tab. 3 World Container Fleet Registered for Panama and Liberia According to Countries of Domicile

2008, 2010-2012 .................................................................................................. 6 Tab. 4 World Container Fleet Controlled Tonnage of Major Shipping Nations 2008-2012 .......... 7 Tab. 5 World Container Fleet by Major Operators 2008 and 2012 ............................................ 7 Tab. 6 World General Cargo Fleet Development by Ship Type 2008 and 2012 ........................... 8 Tab. 7 World Merchandise Trade by Region and Selected Countries 2011 ................................. 8 Tab. 8 Value of Imports and Exports of the Top Trading Countries 2011 .................................. 9 Tab. 9 Five Largest Container Exporting Nations 2009-2012 .................................................. 9 Tab. 10 TEU-Ranking of the Top 20 World Container Ports in 2011 ........................................... 10 Tab. 11 Container Traffic of World Ports by Geographical Distribution 2011 ................................ 10 Tab. 12 Container Ship Order Book Delivery Schedule by Major Countries of Build 2011 ............ 13

COMMENT - FIGURES

Fig. 1 World Container Fleet Annual Tonnage Changes 1996-2012 ...................................... 5 Fig. 2 World Container Fleet Tonnage Additions and Reductions 1996-2011 .......................... 5 Fig. 3 World Container Fleet Development 1986-2012 .......................................................... 5 Fig. 4 World Fully Cellular Container Fleet TEU-Size Structure 2002-2012 ............................ 6 Fig. 5 World Fully Cellular Container Fleet Ship Size Development 2002-2012 ....................... 6 Fig. 6 TEU-Capacity of Top Ranking ContainerShip Operators 2008-2012 ................................ 7 Fig. 7 World General Cargo Fleet - Annual Tonnage changes 1996-2012 ................................ 8 Fig. 8 World General Cargo Fleet Tonnage Additions and Reductions 1996-2012 .................... 8 Fig. 9 World total Trade by Commodity Group 2011 ............................................................. 9 Fig. 10 World total Trade of Manufactured Goods by Product Group 2011 ................................. 9 Fig. 11 World Trade (Value Related) and World Container Port Traffic (TEU-based) 1988-2010 .... 9 Fig. 12 Container Port Traffic by Region 2011 ....................................................................... 10 Fig. 13 Monthly Container Traffic of Selected Ports by Region 2001-2011 ................................. 11 Fig. 14 Monthly HARPEX Container Charter Rate Index 2006 up to April 2012 ........................... 12 Fig. 15 German Sea Freight Indices 2006 up to March 2012 .................................................... 12 Fig. 16 Second Hand Prices for 5 Years Old Container Ships 2006-2012 by TEU-Size Classes ....... 12 Fig. 17 Newbuilding Contracting Prices for Container Ships 2006-2012 by TEU-Size Classes ........ 12 Fig. 18 World Container Fleet New Orders and Broken-up Tonnage, Quarterly 2006-2012 ........ 13 Fig. 19 World Container and General Cargo Order Book, Quarterly 2006-2012 .......................... 13

5-16

Contents World Container and General Cargo Shipping www.isl.org

4 SSMR May/June 2012

Page

ISL InfoLine Special

(1) ONLINE INFORMATION COMPILED FROM LEADING INDUSTRY SOURCES (2) ISL SEABASE NEW LITERATURE ................................... 17

ISL Statistical Tables

(1) WORLD CONTAINER FLEET

1.1 Key Figures on the World Fully Cellular Container Fleet by TEU-Size Class 2012 .............. 23 1.2 World Fully Cellular Container Fleet Development 2001-2012 ....................................... 23 1.3 Additions to the World Fully Cellular Container Fleet by Country of Domicile 2006-2011 ... 24 1.4 Additions to the World Fully Cellular Container Fleet by TEU-Size Class 2006-2011 .......... 24 1.5 World Fully Cellular Container Fleet by Major Flags 2011 and 2012 ............................... 25 1.6 World Fully Cellular Container Fleet by Country of Domicile 2012 ................................. 26 1.7 World Fully Cellular Container Fleet by dwt-Size Class and Division of Age 2012 .............. 27 1.8 World Fully Cellular Container Fleet by TEU-Size Class and Division of Age 2012 ............. 27 1.9 World Fully Cellular Container Fleet by dwt-Size Class and TEU-Capacity 2012 and

Order Book as of January 1st, 2012 .......................................................................... 28 1.10 World Fully Cellular Container Fleet Size Dimensions 2012 ........................................ 28 1.11 Container Fleet by Operators as of February 2012 ...................................................... 29 1.11.1 Top 15 Container Operators .................................................................................... 29 1.11.2 The Global Players ................................................................................................. 29

(2) WORLD GENERAL CARGO FLEET

2.1 Key Figures on the General Cargo Fleet by Type and dwt-Size Class 2012 ...................... 30 2.2 General Cargo Fleet Development by Ship Type 2003-2012 ......................................... 30 2.3 General Cargo Fleet by Major Flags 2011 and 2012 ..................................................... 31 2.4 General Cargo Fleet by Country of Domicile 2012 ...................................................... 33 2.5 General Cargo Fleet by Ship Type and Top Ten Countries of Domicile 2012 ..................... 33 2.6 General Cargo Ships by Type and Divison of Age and Order Book 2012 ......................... 34 2.7 World General Cargo Fleet by dwt-Size Class and Division of Age 2012 .......................... 34 2.8 General Cargo Ships Size Dimensions 2012 ............................................................ 35 2.9 Additions to the World General Cargo Fleet by Country of Domicile 2008-2011 ................ 35

(3) BROKEN-UP CONTAINER AND GENERAL CARGO SHIPS

3.1 Broken-up Container and General Cargo Ships by Major Types 2001-2011 ..................... 36 3.2 Broken-up Container and General Cargo Ships by Major Flags 2001-2011 ...................... 36

(4) WORLD TRADE DEVELOPMENT AND WORLD CONTAINER PORT TRAFFIC

4.1 World Merchandise Trade by Region and Selected Countries 2010 and 2011 ................... 37 4.2 Leading Importers and Exporters of Manufactures by Main Commodity Categories 2010 .. 38 4.2.1 Iron and Steel ....................................................................................................... 38 4.2.2 Chemicals ............................................................................................................ 38 4.2.3 Pharmaceuticals .................................................................................................... 39 4.2.4 Office and Telecom Equipment ................................................................................. 39 4.2.5 Automotive Products .............................................................................................. 40 4.2.6 Office and EDC ...................................................................................................... 40 4.3 World Container Port Traffic .................................................................................... 41 4.3.1 World Container Port Traffic by Country 2004-2011 .................................................... 41 4.3.2 World Container Port Traffic of Selected Ports by Region 2006-2011 .............................. 42 4.3.3 Container Traffic of Selected Ports by Share of Loading and Unloading Regions 2011 ....... 44

(5) WORLD SHIPBUILDING CONTAINER AND GENERAL CARGO SHIPS ON ORDER

5.1 Existing World Container and General Cargo Fleet by Major Areas of Build 2012 .............. 46 5.2 Container Ships on Order .......................................................................................... 46 5.2.1 Container Ships on Order and New Orders by Type 2008-2012, Quarterly ......................... 46 5.2.2 Container Ships on Order by Top Countries of Build and TEU-Size Class 2012 .................. 47 5.2.3 Container Ships on Order by Major Countries of Build and Delivery Schedule 2012 .......... 47 5.2.4 Container Ships on Order by Ship Yard and Delivery Schedule 2012 ................................. 47 5.3 General Cargo Ships on Order .................................................................................... 48 5.3.1 General Cargo Ships on Order and New Orders by Type 2008-2012, Quarterly ................... 48 5.3.2 General Cargo Ships on Order by Major Countries of Build and Delivery Schedule 2012 ....... 48 5.3.3 General Cargo Ships on Order by Ship Yard and Type 2012 ............................................ 48 5.4 New Container and General Cargo Ship Orders by Major Countries of Build 2007-2011 ....... 49 5.5 New Container and General Cargo Ship Orders by Major Countries of Domicile 2007-2011 ... 50

ISL Market Review

17-22

23-50

52-78

Comment - World container and general cargo shipping

SSMR May/June 2012

www.isl.org

5

1 WORLD CONTAINER AND GENERAL CARGO FLEET DEVELOPMENT 2011/2012

Overcapacity and declining rates characterized container shipping in 2011. Until mid-2011, the charter rates have benefited from the market recovery. In the second half the rates have fallen back to the level of mid-2009. The large number of additions to the fleet in the upper size segment has accelerated the cascade effect, creating pressure on rates in all size segments and crowding out smaller units. At the same time, the slowdown of growth in many industrialised countries led to a deceleration of demand for capacity. About 1.2 million TEU of container ship capacity came into service in 2011, thereof 0.6 million TEU of very large Post-Panamax ships (more than 10,000 TEU). As of January 1st, 2012, the fully cellular container fleet comprised 4,993 ships with 15.3 million TEU, a rise of 8.7 per cent compared to a year earlier (see Figure 1). At the same time, the size of the general cargo fleet decreased by 1.6 per cent compared with 2011 and comprised 16,822 ships with 105 million dwt and 2.2 million TEU of capacity at the beginning of 2012.

1.1 World cellular container fleet

1.1.1 Container fleet development 2011/2012

Due to cancellations, conversions and delays, only 1.2 million TEU of additional container ship capacity came into service in 2011 the planned deliveries amounted to about 2 million TEU. In the same period, tonnage with a capacity of only 82,000 TEU was removed from the market. At the beginning of 2012, the container fleet comprised 4,993 ships with 16.3 million TEU, up 8.7per cent since the start of the year (after 9.5 per cent in 2010). The idle container fleet increased by 82 per cent during 2011 to capacity of 595,000 TEU at the start of 2012. Fleet development trends can be summarised as follows: Between the beginning of 2008 and 2012, the

container fleet expanded on average by 9.2 per cent per year in terms of TEU, and the number of container ships by 4.1 per cent.

During the years 2007-2011, 1,570 container ships with 656 million TEU and 80.1 million dwt were added to the trading fleet. During the same period, at least 412 container ships with 0.7 million TEU and 11.0 million dwt were reported as broken up.

The 194 new deliveries in 2011 comprised 109 Post-Panamax vessels, thereof 46 Ultra Large Container Ships (ULCS) with a capacity of more than 10,000 TEU

Ships added to the world container fleet during 2011 represent 3.8 per cent of all fully cellular container ships, 7.4 per cent of the deadweight tonnage and 8.0 per cent of the TEU capacity of the active container fleet at the beginning of 2012.

According to Alphaliner, the idle containership fleet dropped to 560,000 TEU mid of May 2012 from 900,000 TEU in mid-March. For comparison, only 63

Fig. 1: World container fleet annual tonnage changes as of January 1st, 1998 2012 (TEU- %)

Fig. 2: World container fleet tonnage additions and reductions

1997 2011 (mill. dwt)

Tab. 1: World container fleet additions/reductions 2007, 2010 and 2011

Fig. 3: World container fleet development as of January 1st, 1986 2012 (Index 1986 = 100)

Sources: If not otherwise mentioned, the source for tables and figures concerning the world merchant fleet, special ship type features and order book information is ISL based on IHS Fairplay, please quote accordingly. In general merchant fleet data refer to ships of 300 gt and over. Explanatory notes: The total container fleet includes only fully cellular container ships. General cargo ships The specification of sub-types (see table left side) is based on the classification provided by IHS Fairplay. Tonnage additions/reductions: Additions entering the fleet refer to the fleet data of the following year. Reductions refer to the fleet data of the respective year.

0.0

2.5

5.0

7.5

10.0

12.5

15.0

17.5

1998 2000 2002 2004 2006 2008 2010 2012

16.5

12.9

6.4

9.4

13.111.4

9.0

11.6

13.5

16.3

13.812.8

5.8

9.5 8.7

TEU

%-c

hang

e

02468

101214161820

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

mill

dw

t

Additions

Reductions

2007 2010 2011No 1000 No 1000 No 1000

TEU TEU TEUAdditions to fleet 410 1313 273 1371 194 1229 -10.4 -1.7Reductions from fleet 24 26 99 170 57 82 -51.9 32.8

2008 2011 2012

4259 10760 4882 14071 4993 15297 8.7 9.2

av. TEU % growth '07 - '11

Total Fleet as of Jan. 1st.

TEU-% change '10 - '11

0

200

400

600

800

1000

1200

1400

1600

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

No mill dwt 1000 TEU

Comment - World container and general cargo shipping

SSMR May/June 2012 6

www.isl.org

units with a capacity of 80,000 TEU were reported as idle by end of May 2011.

1.1.2 Size dimensions of the world container fleet The sizes of newly delivered container ships continued to grow in 2011. The average capacity of the 194 new container ships delivered in 2011 was 6,340 TEU, an increase of 22 per cent over 2010. The average size of container ships has more than doubled in 20 years. Since August 2006, 111 Ultra Large Container Ships (ULCSs) of over 10,000 TEU have been delivered, including 29 vessels with capacities of 14,000 TEU and above. A further 165 vessels with capacities of more than 10,000 TEU are under construction. The average size of cellular container ships in the order book was 6,900 TEU in early 2012. The largest container ships in service (Maersks E-class) are almost 400 metres long, 56 meters wide and have a design draft of 16 meters.

1.1.3 Ownership patterns of the world container fleet

World container fleet by registered flags

Just like in the other fleet segments, large shares of the fully cellular container fleet are attributable to open registry flags. At the beginning of 2012, the top ten open registry flags held 55.4 per cent of the world container capacity (TEU), nearly the same share than five years ago (53.4 per cent). Liberia is in lead with 975 container ships and 3.4 million TEU, which is equal to 22.3 per cent of the total TEU capacity. Panama ranks second with 738 vessels (2.9 million TEU).

World container fleet by country of domicile

The country of domicile analysis (including container ships of 1,000 gt and over) shows that at the beginning of 2012, 70.3 per cent of the container capacity was not registered in the country of domicile of the owner, but flagged out. The development of the container fleet registered under national and foreign flag is shown in the following table, representing results at the beginning of 2008, 2011 and 2012.

German shipping lines lead the container sector by far with 5.1 million TEU, followed by Japan (1.2 million TEU) and Denmark (1.1 million TEU). Table 3 illustrates the average TEU growth for the leading shipping nations within the period 2008-2012. The TEU capacity for Germany increased on average by 7.1 per cent in the mentioned period. Other countries with strong growth were France (20.7 per cent), Canada (23.3 per cent) and South Korea (17.7 per cent).

Leading container operators 2012

The market share of the top 15 carriers continued to grow in 2011. According to MDS Transmodal, as of February 2012, the top 15 container operators controlled approx. 10.4 million TEU which account for 70.7 per cent of the global TEU capacity (container ships above 1,000 TEU).

Fig. 4: World fully cellular container fleet TEU-size structure January 1st, 2002 - 2012 (1000 TEU)

Tab. 2: World fully cellular container fleet and order book by TEU-size class as of January 1st, 2012

Fig. 5: World fully cellular container fleet average ship size

development January 1st, 1988 - 2012 (dwt/TEU)

Fig. 6: Idle container fleet as of January 1st, 2008, - May, 1st, 2012

ISL 2012, based on AXS Alphaliner.

Fig. 7: TEU-capacity of top ranking containership operators as of 2008 2012 (February, 1st)

TOTAL2008 2011 2012 2008 2011 2012 2012

TEU %-share 33.8 29.8 29.7 66.2 70.2 70.3mill dwt 44.9 49.1 52.9 86.4 112.6 124.2 177.2mill TEU 3.3 3.7 4.1 6.5 8.7 9.7 13.8

Foreign flagNational flag

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Mill

. TEU

10000 and over 8000-10000 6000-8000

4000-6000 2000-4000 = 10000 111 1406 9.2 165 2204 50.6Total 4993 15297 100.0 631 4356 100.0

TEU Size class

Fleet Order book

1000

1500

2000

2500

3000

3500

4000

10000

15000

20000

25000

30000

35000

40000

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

TEU

dwt

dwt

TEU

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Mill

. TEU

Comment - World container and general cargo shipping

SSMR May/June 2012 7

www.isl.orgwww.isl.org

The Swiss operator MSC recorded the highest fleet growth in the period 2008-2012 with 700,000 TEU to its fleet, whereas the largest carrier, Maersk Line, increased its capacity by 400,000 TEU. The Danish Maersk Line operates a fleet of 529 vessels with a capacity of 2.14 million TEU equal to 14.5 per cent of the total world container fleet capacity, followed by MSC with 1.86 million TEU (12.6 per cent) and the French operator CMA-CGM with 1.17 million TEU (7.9 per cent). Of the top operators, the highest TEU-based expansion was reached by MSC with 60 per cent, followed by APL (53 per cent), Hamburg Sd (49 per cent) and CMA-CGM (46 per cent). Charter activities are a determining factor of the container shipping market. The analysis for February 2012 shows that 47 per cent of the TEU-capacity of the world container fleet equal to 1,953 container ships is attributable to the container charter market.

1.2 World general cargo fleet 1.2.1 General cargo fleet development 2010/2011

During the last decade the general cargo fleet tonnage has remained relatively stable at a time when the container fleet grew by about 140 per cent. Comparing the total deadweight tonnage of January 1st, 2011 and 2012, the general cargo fleets capacity shrunk by 1.6 per cent. About 7.7 million were removed from the fleet (demolitions and other withdrawals), while 5.8 million dwt of new ships were delivered in 2011. At the beginning of 2012, the total general cargo fleet consisted of 16,822 ships with 105 million dwt. In comparison, the order book amounted to 1,004 vessels with 13.7 million dwt, equivalent to 13.0 per cent of the fleet. Since 2007, 2,746 general cargo ships with 26.6 million dwt were added to the fleet and 2,387 ships with 19.7 million dwt were reported as broken up. The fleet analysis indicates that the general cargo fleet is composed of various sub-types having their own momentum in the market. At the beginning of 2012, the following Special types sub-types specified by IHS Fairplay can be distinguished:

The yearly growth rate for multi-purpose/single-deck

ships in the period 2008-2012 stood at 4.2 per cent.

Ships of 1,000 TEU and above; ISL based on MDS Transmodal

Fig. 8: World general cargo fleet tonnage additions and reductions 1997-2011 (mill. dwt)

Tab. 3: World general cargo fleet development by ship type as of January 1st, 2008 and 2012

Tab. 4: World merchandise trade by region and selected countries 2011 (bill US$ and %)

Source: WTO; World Trade Statistics 2012

Ship dimensions The largest container ships as of April 1st, 2012 Maersk E-Class: 170,794 gt /156,907 dwt/ 12,508 TEU , L 398m/ B 56.4m/ D 16.0m Built: 08/2006, Flag: DIS, COD: Denmark; MSC Daniela Class: 151,559gt /156,301dwt /14,000TEU, L 366/ B 16m Built: 12/2008, Flag PAN.

Ship Type Noshare

of 1000

dwtshare of dwt

1000 TEU

share of TEU

av. ship size (dwt)

Single deck ships 10238 60.9 60608 57.6 1427 65.1 5920Multi deck ships 2761 16.4 15746 15.0 419 19.1 5703Reefer ships 984 5.8 5663 5.4 64 2.9 5755Ro/Ro cargo ships 1350 8.0 6140 5.8 209 9.5 4548Special ships 1489 8.9 17127 16.3 73 3.3 11502of which

Vehicles carrier 805 4.8 12608 12.0 44 2.0 15662Heavy load carrier 107 0.6 2700 2.6 17 0.8 25237Fish/Live fish carrier 280 1.7 406 0.4 0 0.0 1449Livestock carrier 104 0.6 587 0.6 0 0.0 5642Pallets carrier 55 0.3 164 0.2 2 0.1 2979Other special types 138 0.8 662 0.6 10 0.4 4796

Total General cargo fleet 16822 100.0 105284 100.0 2193 100.0 6259

0

500

1000

1500

2000

2500

Maersk-Line

MSC CHKY Alliance

Grand Alliance

New World CMA-CGM Evergreen

1000

TEU

2008 2009 2010 2011 2012

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

mill

dw

t

Additions

Reductions

2008

Ship type No No No dwt 2008 2012Single deck ships 9985 51.3 10238 60.6 0.6 4.2 5.1 5.9Special ships 1389 14.0 1489 17.1 1.8 5.2 10.1 11.5Multi deck ships 3834 24.2 2761 15.7 -7.9 -10.2 6.3 5.7Ro/Ro cargo ships 1303 6.7 1350 6.1 0.9 -2.0 5.1 4.5Reefer ships 1136 6.6 984 5.7 -3.5 -3.9 5.8 5.8TOTAL 17647 102.8 16822 105.3 -1.2 0.6 5.8 6.3

2012(1000 dwt)

Average sizeAv. growth rate '08-'12 mill

dwtmill dwt

Value Value2011 '06-'11 '10 '11 2011 '06-'11 '10 '11

EU (27) 6029 5.4 12.0 17.1 6241 5.1 12.5 16.9Germany 1474 5.7 13.3 16.2 1254 6.6 15.2 17.5

Africa 597 10.4 28.4 19.4 555 14.5 13.8 19.9Asia 5534 9.9 30.3 9.2 5568 11.8 31.4 15.3

Japan 823 4.9 32.6 6.9 854 8.0 25.5 23.2China 1899 17.2 31.3 20.3 1743 21.7 38.7 24.9

USA 1481 7.6 21.0 15.9 2265 3.3 22.6 15.1Russian Federation 522 11.7 31.9 30.5 323 4.1 24.1 -22.0World 17779 8.0 21.7 16.7 18000 7.6 20.9 17.1

Region/Country

Annual % change Annual % changeImportsExports

Comment - World container and general cargo shipping

SSMR May/June 2012 8

www.isl.org

In the same period, the fleet of multi-deck ships and reefer vessels decreased by 10.2 per cent and 3.9 per cent respectively.

Besides the single deck fleet, only the special fleet segment (incl. car carriers and heavy load vessels) shows a positive yearly growth with 5.2 per cent in the period 2008-2012.

2 FUNDAMENTALS OF THE CONTAINER AND GENERAL CARGO MARKET

2.1 Major world trade developments 2011/2012 The World Trade Organisation (WTO, Press Release 658/2012) has just published their assessment of the world trade development in 2011 and prospects for 2012. The most relevant features for the seaborne trade development are highlighted below. After the already disappointing 5.0 per cent growth in

2011 the WTO expects an even lower growth of 3.7 per cent in 2012. There are several problems the leading economies are struggling with, including the European sovereign dept crisis and a recessive industrial growth in China.

The outlook for the world trade has been damped by number of post-2008 after-shocks the EU dept-crisis, the political upheaval in Arabia and Northern Africa and some natural disasters and their impact such as the Tsunami in Japan and big flooding in South Asia.

Therefore, there may be a slowdown in global merchandise trade volume growth of the mentioned 3.7 per cent in 2012, derived from a 2.1 per cent growth in developed countries and 5.6 per cent in developing ones.

Asia showed the fastest real export growth of any region in 2012 with a plus of 6.6 per cent, headed by India and China, whose exports to the rest of the world each gained 16.1 per cent and 9.3 per cent, respectively. Its quite remarkable that India was the only country in Asia that showed a one-digit decrease rate during the economic crisis.

Caused by the mentioned Tsunami and the nuclear power plant disaster in Fukushima, both exports and imports dipped by 0.5 per cent equal to the GDP.

2.2 World container port traffic regional highlights 2009/2010

According to data published by the UN Infrastructure Services Unit, the worldwide container traffic reached a total of 564 million TEU in 2011, equal to a year on year growth of 8.9 per cent. The ISL port data base covers more than 90 per cent (515 million TEU) of the global container port traffic. ISL figures show a growth of 7.0 per cent in the major container ports. This increase is mainly driven by surging volumes at Far Eastern ports, whose container throughput grew above average. Based on information from HIS, 29 per cent of the worlds full container shipments originate in China, and another 31 per cent in the total rest of Asia. Chinese ports (including Hong Kong) have increased their container traffic by 11.1 per cent, pushing their world market

Fig. 9: World total trade by commodity group 2011 (% share of value in US$)

Source: WTO; World Trade Statistics 2012

Fig.10: World total trade of manufactured goods by product group

2011 (% share of value in US$)

Source: WTO; World Trade Statistics 2012

Tab. 5: Five largest container-exporting nations 2007-2011

(in mill. TEU)

Source: HIS Global Insight, Trends in the World Economy and Trade,

Volume 1/April 2012

Fig. 11: World trade (value related) and world container port traffic (TEU-based) 1990-2011 (Index 1990=100)

ISL Port Data Base and WTO; World Trade Statistics 2012

Explanatory note Major Open Registries: Countries permitting the registration of ships owned by non-residents. In general, ISL figures on open registry flags are restricted to the top ten major flags: Panama, Liberia, Bahamas, Malta, Marshall Islands, Cyprus, St. Vincent, Antigua & Barbuda, Bermuda and Cayman Islands. (01.01.2012). Country of registration and country of domicile: Country of registration indicates the country of the port of registry of a country (flag). The country of domicile indicates where the controlling interest of the fleet is located in terms of the parent company. This information is applicable to merchant fleet vessels of 1,000 gt and above.

Fuels and mining

products21.1% Agricultural

Products9.5%Manufactures

70.9%

0 10 20 30

Office and telecom equipment

Other machinery

Chemicals

Other semi manufactured goods

Iron and steel

Clothing

Textiles

% share of total manufactures

2007 2008 2009 2010 2011 '09-'10 '10-'11

China 28.9 29.6 25.9 31.3 33.7 20.8 7.7United States 9.7 11.0 10.1 11.2 12.1 10.9 8.0Japan 5.9 6.0 4.8 5.7 5.6 18.8 -1.8South Korea 4.3 4.5 4.4 5.2 5.7 18.2 9.6Taiwan 3.2 3.2 2.9 3.4 3.7 17.2 8.8

yearly growth Export Country

thousands of TEUs

0

100

200

300

400

500

600

700

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Containertraffic (TEU)

World trade (Value, real)

Comment - World container and general cargo shipping

SSMR May/June 2012 9

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share to 29 percent in 2011 up from 26.8 percent in 2009. Six of the top ten container ports are located in China, with most of those ports recording faster growth than ports in other regions, while growth of the remaining regions in Asia follows nearby. The total container traffic of the top 50 ports listed in Tab. 4.3.3 on page 44 grew by 8.6 percent in 2011 with only Long Beach, Mina Raysut, Manila, Yokohama and Nagoya suffering noteworthy losses. During 2011 only two of the ports showing increases of more than 20 per cent were Chinese, namely the ports of Dalian and Xiamen. The highest increase of all top 50 ports was reached by the port of Kobe, skyrocketing by more than one third up to 2.7 mill. TEU. Other ports with very good results were located in Europe (Algeciras, +28.4 percent, St. Petersburg +22.6 per cent and Bremen/Bremerhaven + 21.0 per cent). The highest TEU gain in the North American market was reached by the ports of Savannah and New York with a mere 4 per cent. ISLs Monthly Container Port Monitor (MCPM) showed all in all a heterogeneous development in 2012. The rally of the MCPM World index ceased in April at 260.1 points, nearly the same than one year before, after having jumped up to 267 in July 2011 and sagging down to 223 points at the turning of the year. Generally spoken, the MCPM indicates that international trade was moving with no clear trend. In line with the recent expansion of Chinese foreign trade, it was first and foremost the Asian ports which were driving the 2012 improvement.

2.3 The general cargo and container market rates and prices

General cargo shipping

In contrast to the other shipping sectors, the general cargo and in particular the heavy lift and MPP sectors are less cyclical, as the shipped goods are to a large part capital intensive goods (such as power stations and other large machineries). These goods need a relatively long scheduling. Consequently rates and demand for ship tonnage decreased with a time lack to the global economic crisis. Moreover the market has to absorb a large portion of new ships and as a result owners had to struggle for charters. While the number of infrastructure projects shows growing tendencies for example in the offshore supply sector or in developing countries and emerging markets, there will be requirements to transport specialised or project cargoes in the medium term. Charter rates for a 9,000 dwt MPP-vessel declined by around 5.2 per cent during the last quarter 2011 rates were around US$/day 5,800 at the beginning of 2012 and around US$/day 6,400 two years ago. Container charter rates

After a very disillusioning second half of 2011, container operators felt in the doldrums, with the HARPEX Containership index not being far from the disastrous levels of 2009, despite a rising demand of manufactured goods in Europe and the Americas as well as a good investment climate. Driving factor for this downward trend was without any doubt the growth of capacity that outstripped the positive world trade development. The size classes above 7000 TEU are particularly affected. Since all possibilities with regard to slow steaming have been maxed out, the delivery of

Tab. 6: TEU-ranking of the top 20 world container ports in 2011

ISL Port Data Base 2012

Fig. 12: World container port traffic by continents 2011 (TEU-% share)

ISL Port Data Base 2012 Fig. 13: Monthly HARPEX container charter rate index 2008 up to

March 2012

ISL based on Harper Petersen & Co

The ISL Monthly Container Port Monitor is continuously highlighting the container traffic (TEU) of the worlds major container ports. The MCPM is a short-term market indicator on world container traffic and a benchmarking tool for the port industry Information is presented in form of monthly indices and quarterly TEU-traffic aggregates. Indices have been provided since January 2000 for the top American, Asian, and European/Oceanian ports. The monitor is distributed quarterly as online service. For more information please see www.isl.org/infoline

2011 (2001) Port (Country) 2001 2010 20112010-2011

2001-2011

1 (5) Shanghai (China, PR of) 6.3 29.0 31.7 9.4 17.52 (2) Singapore (Singapore) 15.6 26.0 29.9 15.1 6.83 (1) Hong Kong (China, PR of) 17.8 23.7 24.4 2.9 3.24 (8) Shenzhen (China, PR of) 5.1 22.3 22.6 1.0 16.15 (3) Busan (Korea, Rep. of) 8.0 14.2 16.2 14.0 7.36 (50) Ningbo (China, PR of) 1.2 13.1 14.7 12.6 28.47 (31) Guangzhou (China, PR of) 1.7 12.5 14.3 14.2 23.48 (17) Qingdao (China, PR of) 2.6 12.0 13.0 8.4 17.39 (13) Dubai Ports (UAE) 3.5 11.6 12.6 9.0 13.7

10 (6) Rotterdam (Netherlands) 6.1 11.1 11.9 6.6 6.911 (26) Tianjin (China, PR of) 2.0 10.1 11.6 15.0 19.112 (4) Kaohsiung (Taiwan) 7.5 9.2 9.6 5.0 2.513 (12) Port Kelang (Malasyia) 3.8 8.9 9.4 6.4 9.614 (9) Hamburg (Germany) 4.7 7.9 9.0 14.2 6.815 (11) Antwerp (Belgium) 4.2 8.5 8.7 2.3 7.516 (7) Los Angeles (US) 5.6 7.8 7.9 1.4 3.517 (47) Xiamen (China, PR of) 1.3 5.2 6.5 24.1 17.418 (49) Dalian (China, PR of) 1.2 5.2 6.4 22.1 18.119 (10) Long Beach (US) 4.5 6.3 6.1 -3.2 3.120 (15) Bremen Ports (Germany) 3.0 4.9 5.9 21.0 7.1

mill TEU TEU %- growthRanking

Africa4% America

15%

Asia61%

Europe18%

Oceania2%

0.0

250.0

500.0

750.0

1000.0

1250.0

1500.0

Jan. 08 Jul Jan. 09 Jul Jan. 10 Jul Jan. 11 Jul Jan. 12

HA

RPE

X In

dex

Comment - World container and general cargo shipping

SSMR May/June 2012 10

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ever larger vessels will effectively increase the markets supply side on a wide scale. Even though the fleet additions target mostly the upper size classes, the cascading effect leads to higher than expected pressure on rates for smaller size classes as well. Most recent fleet data shows a slightly sinking number of idle container vessels, but oversupply will remain an issue for quite some time. The weighted Charter Rate Index from Harper Peterson & Co., for example, stood at a level of 398 in late 2011 (half the level of a year ago). From that time on, the index climbed and is currently at around 450 (compare Fig. 14). End of May 2012, the idle container fleet comprised 237 vessels with 560.000 TEU against 63 vessels with 80,000 TEU a year earlier (source: Alphaliner). This represents only 3.6 per cent of the existing cellular fleet. Container ships 3 months T/C (in US$/14t/TEU/day)

Source: Hamburg Shipbrokers Association (VHSS)

In February 2012, 1,953 container ships representing approximately 47 per cent of the total TEU capacity of the world container fleet were chartered in. Thus, the charter rates are an important indicator for container shipping. Second-hand and contracting prices for container ships

The development of second-hand prices of container vessels is correlating with the increasing overcapacity. While prices for smaller vessels develop relatively modestly, the second-hand prices for bigger ships where predominantly shrinking. Vessel prices for a 4,500 TEU carrier decreased on average by about 14.6 per cent during the last year. Looking at the second-hand and newbuilding prices based on available market data, the market tendencies can be summarised as follows: Second-hand prices for five-year old container ships

of 3,000 TEU reached an average price of 31.3 million US$ in late 2011. The newbuilding prices for the same size and period stood at 35 million US$ one year earlier.

As expected there were continuing second-hand and newbuilding price decreases during 2011 for ships of all TEU sizes.

For the first months of 2012 the development of second-hand and newbuilding prices was uneven.

3 FUTURE TONNAGE SUPPLY - THE SHIPBUILDING MARKET FOR CONTAINER AND GENERAL CARGO SHIPS

3.1 New orders and order book development

Container ships on order In 2011, a total of 253 container ships with a combined capacity of 1.8 million TEU were ordered worldwide, up from 0.7 million TEU one year earlier. At the beginning of 2012 the order book for container ships comprised 631 ships with 23.3 million cgt (4.4 million TEU), against 21.1 million

Fig. 14: Monthly container traffic of selected ports by region2002-2012 (TEU - Index monthly av. 2000=100)

ISL Monthly Container Port Monitor 2012

Fig. 15: Second hand prices for 5 years old container ships 2006 -

2011 by TEU size classes (mill. US$ at year end)

ISL based on Platou Monthly 04/2012

Size class 05.09 04.10 04.11 03.12 04.12 05.12 2300 TEU Grless 2.4 2.8 8.2 3.4 3.4 3.42000 TEU Geared 2.8 4.5 7.8 3.9 3.8 4.0 1300 TEU Geared 3.8 4.3 10.1 4.9 5.2 6.0 500 TEU Geared 8.7 6.2 12.4 13.1 13.0 12.7

Beg. of m onth

0

50

100

150

200

250

300

350

400

450

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

China

Japan, South Korea, Taiwan

South Asia

0

100

200

300

400

500

600

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

North Range

Baltic Sea

Mediterranean

0

50

100

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300

350

400

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

South America

North America Atlantic

North America Pacific

0

50

100

150

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250

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350

400

450

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Africa

Oceania

Near East

0

10

20

30

40

50

60

1000 TEU 1700 TEU 3000 TEU 4500 TEU

mill

US

$

-3.3 - -11.4Price % changes 2010- 2011

-14.6

Comment - World container and general cargo shipping

SSMR May/June 2012 11

www.isl.orgwww.isl.org

cgt (3.8 million TEU) at the start of 2011. The container ship order book at the beginning of 2012 represented a TEU ratio of 28.5 per cent in relation to the existing container fleet. This ratio was slightly higher than in January 2011 (27.2 per cent). Based on the current order book the container fleet capacity will increase by 10 per cent in 2012 and about 9 per cent in 2013 if ships are delivered as planned. The order book still remains biased towards larger ships, with 79 per cent of the capacity on order concentrated on ships of over 6,000 TEU. A noticeable 165 container ships on order had capacities of 10,000 TEU and above, of which 34 ships with more than 14,000 TEU. In terms of cgt, ships with a capacity of 10,000 TEU and above represent 43 per cent of the containership order book.

General cargo ships on order

New orders for general cargo ships (incl. various ship types such as ro-ro cargo ships, car carriers or heavy-lift vessels) amounted to 345 vessels with 2.7 million cgt (3.4 million dwt) in 2011, a decrease of 26.5 per cent compared with 2010. During the same period, 507 general cargo ships with 5.3 million cgt left the order book after completion. Contract cancellations in 2011 amounted to 120 vessels with a capacity of 1.5 million dwt. The order book as of January 1st, 2012 comprised 1,004 general cargo ships with 10.2 million cgt and 13.7 million dwt, respectively. The general cargo ship order book at the beginning of 2012 represented a dwt ratio of 13.0 per cent in relation to the existing general cargo fleet.

3.2 Leading shipbuilding countries At the beginning of 2012, 23.0 million cgt of the total container tonnage and 9.0 million cgt of the total general cargo tonnage on order were attributable to yards in Asia. Their cgt market share for container and general cargo tonnage stood at 98.7 and 88.1 per cent, respectively. Container shipbuilding is largely a domain of Korean yards. Looking at the order book, Korean yards accounted for 14.3 million cgt equal to 61.1per cent of the total container order book, followed by China with 6.4 million cgt (27.3 per cent). All other shipbuilding countries had cgt shares of less than 5 per cent. In total, only 13 countries are involved in container shipbuilding. As of January 1st, 2012, the order book ranking for general cargo ships is led by China with 3.9 million cgt equal to a market share of 38.4 per cent, followed by Japan with 2.1 million cgt (20.0 per cent), and Korea with 1.7 million cgt (16.3 per cent).

Latest figures on container and general cargo ship orders (1st quarter, 2012): During the first quarter of 2012, only eight new orders for smaller container ships (13,600 TEU) have been reported. As of April 1st, 2012, the order book for container vessels comprised 590 ships with 4.0 million TEU (21.6 million cgt) compared with 604 vessels one year earlier. During the first quarter 2012, only 15 new orders for general cargo ships were placed. As of April 1st, 2012, the order book for general cargo ships comprised 916 ships with 12.5 million dwt (9.2 million cgt).

Fig. 16: New building contracting prices for Container ships 2006 -2011 by TEU size classes (mill. US$ at year end)

ISL based on Platou Monthly 04/2012 Fig. 17: World container fleet - new orders and broken-up

tonnage, quarterly 2005 2011 (mill. dwt)

Fig. 18: World container and general cargo order book, quarterly

2006 2012 (mill. cgt)

Explanatory note The compensated gross tons (cgt) concept was first devised by shipbuilder associations, and adopted by the OECD Council Working Party on Shipbuilding (WP6), in the 1970s to provide a more accurate measure of shipyard activity than could be achieved by the usual gross ton (gt) and deadweight ton (dwt) measures. The compensated gross tons (cgt) are calculated by multiplying the tonnage of a ship by a coefficient, which is determined according to type and size for a particular ship. Cgt is used as an indicator of the volume of work that is necessary to build a given ship. Cgt coefficients were changed as of January 1st, 2007.

0

20

40

60

80

100

120

1,000 TEU 1,700 TEU 3,000 TEU 4,500 TEU 6,000 TEU

mill

US

$

Price % changes 2010 - 2011-11.6 -7.6-6.9 -4.5 -1.4

3.0

0.0

3.0

6.0

9.0

12.0

15.0

18.0

05/IV 06/II 06/IV 07/II 07/IV 08/II 08/IV 09/II 09/IV 10/II 10/IV 11/II 11/IV

mill

dw

tBroken-up

New orders

0

5

10

15

20

25

30

35

40

45

06/I 06/III 07/I 07/III 08/I 08/III 09/I 09/III 10/I 10/III 11/I 11/III 12/I

mill

cgt

Container ships

General cargo ships

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