Positive signs of box shipping rebound continuing, says Maersk

5/23/2017

Maersk expects robust Asian exports and strong Chinese import demand to anchor global box volumes and boost revenues through 2017.

The Danish box giant reported last week that global container demand outgrew nominal supply in the first quarter of 2017 (Q1), although higher fuel bills hit the line’s profits in spite of improved freight rates. But despite the profits downturn, Maersk’s management team insisted the line was on track to deliver a result improvement of above €1 billion for 2017 compared to 2016, as previously promised.

Achieving that goal will rely on continued success in Asia, and Robbert van Trooijen, Maersk Line’s Asia Pacific CEO, told Lloyd’s Loading List he expects trade on key lanes to continue to see positive growth through 2017 after a strong Q1.

“The signals are there for a much healthier rest of the year,” he said. “The European contract season was the first to be concluded and that showed quite a few promising changes. The Pacific season also had some pretty good changes. And Africa and Latin America have also seen some really good increases towards the end of quarter 1. That has paved the way for a much more positive outlook for 2017.”

He continued: “We saw 10% global growth in volumes in Q1. If you look just at Europe, that’s 1-3% growth on the Europe trades, and it’s about 4% on the Pacific. That in itself is quite a healthy picture. And Asia is definitely part of that story.”

Van Trooijen predicted that the current strong levels of demand for Chinese imports and exports would continue through the rest of the year.

“It’s not seasonal,” he said. “I think demand has almost surprised us a little bit by how positive it has been. At the same time, here in Asia the charter market is pretty dry. You can’t really find any ships at the moment.

“Partly, of course, this is because of the alliance reshuffling and the chartering of surplus tonnage to help with the cascade. But we also saw a very positive trend in demand.”

He also said the various reshuffling of alliances had caused congestion at Chinese hubs ports such as Shanghai and Ningbo. “Also we see that in China, the weather of late has seen some more port closures,” he added. “But we very much see it as a temporary situation, and then we will see a more healthy picture for the rest of the year. We expect a pretty positive peak season in Q3.”

The outlook for southeast Asia was also positive. “If you look at Thailand, if you look at Vietnam, we’ve certainly seen very good growth. The underlying demand trends are positive.”

Turning to supply, he also said lines were benefitting this year from less vigorous expansion of capacity than in recent years. “If you just look at the supply side of it, it’s a very balanced approach to the supply-demand picture so far,” he said. “The total order book compared to the total fleet size is about 14.5% now versus 20% in the same period last year. So, relative to the total size of the fleet, the new order building book is much smaller.”