Demanding Answers

From CSM – The Container Shipping Manager (1/19/2013):

1. “More challenges await carriers in 2013 with oversupply set to continue –
– “Containership deliveries will reach a record high in 2013, according to a recent report published by London-based shipbroker Breamer Seascope. The report projects that a further 1.7 million TEU of container shipping capacity will enter the market in 2013, surpassing the previous high of 1.5 million TEU in 2008 …”

2. “The influx of mega containerships challenges ports worldwide –
– “With more than 100 ultra large containerships (ULCS) of over 10,000 TEU slated to be delivered in the next three years, as well as the completion of the Panama Canal in 2014, ports worldwide are anxious to carry out expansions to upgrade their handling capability. However, is this ULCS trend beneficial to the port and terminal operators? Hutchison Port Holdings (HPH) deputy group managing director Eric Ip spoke at the second Asian Logistics and Maritime Conference in November in Hong Kong, where he said that to accommodate these mega ships, ports have to invest considerably but the returns remain doubtful. ‘There are challenges but we are not sure about benefits,’ Mr.Ip said …”

3. “Big ships do shippers no favors: fewer calls, slow transits, high inventory costs –
– “As containerships become larger and only with a few major ports capable of handling the biggest, shippers have come to question whether ship size does them more harm than good. Along the east coast of the United States, whose hinterland ranges to the Mississippi River, lies 70 per cent of American consumers, the world’s biggest retail container shipper market. But east coast US ports are only beginning to dredge channels to the depths needed for 14,000-TEUers that are expected to transit the Panama when fully expanded in 2015, which some say will result in more awkward hub and spoke transshipment operations slowing deliveries yet again …”

4. “Reducing capacity – is it easier said than done for carriers? –
– “Will the changing external environment drive carriers to significantly reduce capacity and re-balance the current supply and demand mismatch? Speaking recently at the Global Liner Shipping Conference in Singapore, APL president Kenneth Glenn told delegates that the shipping lines need to adjust their network strategies, their cost bases and pricing policies, so as to better understand their customers’ priorities and generate shareholder values.

“Mr. Glenn was cited by Lloyd’s Loading List as saying that container carriers are ‘very close to a tipping point in liner shipping'” –

“Oversupply” – “tipping point” … Why won’t they acknowledge worldwide diminishing demand?

[“Just how far will you go to abuse our patience, Catiline?” – Marcus Tullius Cicero]