CONTAINER SPOT RATES SLIDE TO 2023 LOWS
The container sector is heading into its normal post-Lunar New Year lull that typically lasts until April/May. The scale of the drops in spot rates is large, but the sector still remains one of the more profitable shipping sectors. The weekly Drewry World Container Index slumped 5% to $3,095 per feu yesterday. However, the index was 118% higher than the 2019 pre-pandemic average of $1,420. The Shanghai Containerized Freight Index, published today, was down another 6% week-on-week to 1,758.82 points, hitting lows not experienced since 2023, before the Red Sea shipping crisis kicked in sending rates back up last year. “Carriers face an uphill battle to reverse the recent rate slide with cargo volumes still muted after the strong January cargo rush that had set new throughput records at key ports,” consultants at Linerlytica noted in a recent market report.
MSC, MAERSK AND CMA CGM INVITED TO JOIN INDIA’S AMBITIOUS SHIPYARD PROJECT
The world’s three largest containerlines have set their sights on India as the country readies massive investments towards its goals of becoming a global maritime powerhouse. The government of Narendra Modi has revealed billion dollar moves on all things shipping through public/private ventures with MSC, Maersk and CMA CGM amongst the first to join India’s plans to bolster its maritime infrastructure. Earlier this month, India’s finance minister, Nirmala Sitharaman, revealed a $2.9bn maritime development fund scheme for the long-term financing of the country’s shipbuilding and repair industry. The government will contribute 49% of the fund and seek the remainder from ports and the private sector. Denmark’s Maersk, the world’s second-largest liner, has signed a memorandum of understanding with India’s Cochin Shipyard to explore ship repair and shipbuilding opportunities. The strategic partnership, which aligns with India’s aim to be among the top 10 maritime nations by 2030 and the top five by 2047, is expected to see the first Maersk vessel repair at Cochin Shipyard already in 2025. According to local media, France’s CMA CGM is expected to emulate this move with a delegation set to visit India shortly. Meanwhile, MSC chief executive Soren Toft has been visiting India this week to meet with Piyush Goyal, Union Minister of Commerce and Industry, to discuss multiple potential investments.
SUPERSIZED MSC WELL PLACED IN NEW LINER CONSTELLATION
Mediterranean Shipping Co (MSC) is about to stretch its lead over its nearest rival to 2m teu with new data showing how well placed it has managed to become as a standalone operator following the shake-up of the liner trades this month. According to consultancy Linerlytica, MSC has better market coverage and a larger market share to the newly formed Gemini Cooperation on the east-west trades. Gemini Cooperation is made up of Maersk and Hapag-Lloyd. “MSC will be able to offer the same or a larger number of weekly sailings on all of the 4 main routes than Maersk and Hapag-Lloyd, using its self-operated services as well as selective partnerships with Premier Alliance on the North Europe and Med routes and with Zim on the US East Coast and PNW routes,” Linerlytica noted in its latest weekly report. MSC now has a 1.87m teu lead over Maersk in Alphaliner’s liner rankings, with its near 2m teu orderbook ensuring that lead will surpass 2m teu in the coming months.
HOUTHIS RETURN TO SHIPPING WAR FOOTING WITH GAZA CEASEFIRE ON THIN ICE
The leader of the Houthis has warned his fighters have their fingers “on the trigger” ready to resume their campaign against merchant shipping passing by the Red Sea in the event that the ceasefire between Israel and Hamas backfires. No ships have been attacked this year, with the Houthis saying they will step back so long as Israel’s war with Hamas ends – a truce that is now increasingly looking in trouble. Israel’s security cabinet has supported president Donald Trump’s demand for all remaining Israeli hostages to be returned on Saturday Israeli prime minister Benjamin Netanyahu has ordered troops to amass inside and around Gaza in response to Hamas’s announcement that it was postponing freeing more hostages until further notice. The ceasefire was already under stress after Trump called last week for Gazans to be evicted from their territory and for the US to take over the area and redevelop it as the “Riviera of the Middle East”.