Container equipment shortages push up container prices
Container equipment shortages across the main trade lanes look set to continue, despite efforts by carriers to reposition and bring additional capacity into the market.
The heavy demand for containerized shipping and the difficulties of handling such huge volumes, means the current equipment imbalance can be expected to deteriorate, predicted CEO and founder of Container xChange. The price was being driven by the urgent demand for equipment in the ocean freight market, taking second-hand prices higher than those previously considered normal for newbuilding container equipment.
Maersk/OOCL doubles earning outlook on high rates, soaring demand
Maersk said 26 April it expects its full-year 2021 earnings to double its previous guidance, citing continued strong demand for ocean shipping and freight rates that are 35 per cent higher than a year ago. It now projects full-year EBIT to be in the range of U$ 9-11 billion, up from earlier guidance of U$ 4.3-6.3 billion.
Hong Kong-based OOCL posted 23 April huge increases in revenue and volume during the first quarter, capitalizing on record rates and heavy demand on its trades out of Asia.
MSC closes in on Maersk as largest operator of container tonnage
MSC is on track to overtake 2M alliance partner Maersk as the world’s largest container line by capacity deployed if it continues with its aggressive acquisition policy.
MSC operates a fleet of 587 boxships comprising 3.9 million teu, while Maersk’s 711 ships have an aggregate capacity of 4.1 million teu according to Alphaliner. The capacity gap stands at just 234,000 teu. With new orders MSC may overtake Maersk some time in 2022.
Unlike Maersk, which has achieved much of its size in the market through the acquisition of other carriers, such as Sea-Land, P&O Nedlloyd and Hamburg Süd, MSC’s growth has been organic, with the Geneva-based line preferring to develop under its own steam.
Read more: Lloyd’s List
World containership fleet update
Shipowners are on the hunt for tonnage again as orders surge for new boxships.
With a wave of optimism surging over container shipping, new capacity is being ordered at breakneck speed. But the race for ever bigger ships appears to have slowed, with lines taking to more flexible units. In March alone, orders were placed for 45 ships of 15,000 teu or large and much of the recent order spree has been for vessels in the 15,000 teu size range which are deployable on various trades with compact narrow-beam designs able to transit the Panama Canal for services to the US east coast. Most of those new tonnages will not be entering service for at least another 18 months, with some not arriving until 2024.
Carriers’ discipline will rein in speculative new buildings. Seaspan sees no return to large-scale ordering without charters already agreed.
Hydrogen fueled shipping
CMA CGM is taking a closer look at renewable hydrogen as another potential path to reducing CO2 of its global fleet. It is sponsoring along with Toyota and Air Liquide the around-the-world voyage of a specialized catamaran. The voyage is being made using renewable energy sources, including hydrogen produced from seawater.
Shell said it would pilot the first use of a ship powered by a hydrogen fuel cell in Singapore.
Shell is also to join a consortium that will trial the use of fuel cells on deep sea vessels. The trial would initially use LNG to power the fuel cells and then hydrogen or other zero emissions fuels with the aim of growing capacity and scale as those fuels become available.
It has backed hydrogen and fuel cells as major enablers of the global energy transition in shipping.
Informal discussions focus on lifecycle GHG/carbon intensity of cleaner fuels for shipping
IMO has facilitated virtual informal discussion sessions 14-15 April on lifecycle GHG/carbon intensity for potential future fuels for shipping. The sessions provided a platform for all IMO Member States and organizations in consultative status with IMO to exchange views and share updated information how to assess and potentially regulate the lifecycle of carbon emissions.
A candidate measure in the IMO Initial GHG Strategy refers to developing “robust lifecycle GHG/carbon intensity guidelines for all types of fuels.
The recent Low and Zero-carbon Alternative Fuel Symposium identified lifecycle assessments as a priority issue for the Organization to work on to further facilitate the development and uptake of alternative marine fuels.
Read more: IMO
Shipping green fuel levy faces opposition from developing nations
A group of developing countries is opposing a proposed fuel consumption levy on ships for decarbonization research and development and instead wants developed nations to contribute more. The stance from an 11-strong coalition that includes China, Brazil and India could pose a significant obstacle to the industry’s signature decarbonization proposal that seeks to raise around U$ 500 million each year for R&D through a mandatory payment of U$2 per ton of fuel consumed. They argued that this approach was in line with a fundamental principle of common but differentiated responsibilities and respective capabilities (CBDR+RC).
It is also a part of the 2018 IMO initial greenhouse gas strategy.
Read more: Lloyd’s List
World Bank calls on policy makers to cut support for LNG bunkering
LNG will have a limited role in shipping’s future fuels and policymakers should cut their support for LNG bunkering, the World Bank has said.
The damning report by the World Bank undermines the value of LNG bunkering related investments and adds another major obstacle to LNG proponents, who despite the fuel’s undeniable growth are in a battle to improve its public perception.
The World Bank’s report calls on policymakers to urgently regulate strong policy action to regulate methane emissions both in the supply chain of LNG and on-board ships.
Methane causes 86 times more warming than CO2 over a 20-year period, and 36 times more warming over 100 years. Methane emissions accounted for around 0.5 per cent of international shipping emissions in 2018, according to the fourth IMO GHG study. But they grew by more than 150% from 2012 to 2018, as the use of LNG and dual-fuel engines increased. The World Bank calls for direct switch to Ammonia and Hydrogen in the report.
Representative across shipping rebut the World Bank’s take on LNG bunkering.
US will push IMO to adopt target of absolute zero emissions by 2050
The US will push the IMO to commit zero greenhouse gas emissions from international shipping by 2050. US special presidential envoy for climate John Kerry announced 20 April that the US wants the global maritime regulator to adopt the target, which would be a major step up from its current goal of reducing GHG emissions from international shipping by at least 50 per cent by 2050 compared to 2008.
Zero emissions imply a 100 per cent absolute reduction in shipping emissions to the point of zero. Net zero implies that emissions can continue, so long as the same amount that is emitted is also removed from the atmosphere.
Read more: Lloyd’s List