Transcript Presentation

World container development stages
Introduction
(1958-1970)
• Introduction of the first
“containerized” commercial
services in the late 1950’s
• Introduction of the first
cellular containerships in
the 1960’s
• High risk investment with
unproven technology
Adoption
(1970-1990)
• The container became
acknowledged as a
transport product
• Intermodal facilities
accelerated
• Investments made in
accordance to commercial
opportunities
• 1979 – 1990 CAGR: 8.1%
Maturity
(2008 - )
Growth
(1990-2008)
• Containerization began to
seriously impact global trade
patterns
• World container traffic
growth fueled by globalization
and China entering WTO
• Post panamax containership
gradually became a dominant
vector
• 1990 - 2002 CAGR: 9.8%
• 2002 – 2008 CAGR: 10.6%
World Container Traffic 1979 - 2008
• Maturation of container traffic
linked to the development of the
Global economic cycle
• Global recession that began in
2008 has been associated with a
significant reduction in
containerized traffic
•Economies of scale recognized
as a significant factor in remaining
competitive; also being reflected
in newbuilding orderbook 2006 2008
200
2002 – 2008: 10.6%
180
160
140
120
1990 – 2002: 9.8%
100
80
1979 – 1990: 8.1%
60
40
20
0
1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007
World container traffic (M teus)
Source: Drewry
Cellular ships – Order and deliveries 2007 -2008
• With expectations that world trade would continue to grow at a fast pace (2008 – 2012:
CAGR: 9%*), shipowners invested heavily in newbuilding programs in 2007.
• The cellular ship orderbook reached an all time high of 63.7% of the existing fleet in 2007
and 50.7% in 2008.
* Q3 2007 Container forecaster (Drewry)
2008 Orderbook by size ranges
• The orderbook for ships between 5,000 and
10,000 teu was equivalent to 32% in 2008.
• ULCCs over 10,000 teu accounted for 36%
of the orderbook in 2008.
• The orderbook was clearly tilted towards
ULCCs(10,000 Teus +) over vessels with
smaller capacity in order to benefit from
economies of scale.
• High bunker prices during 2007-2008
prompted carriers to order big ships to
benefit from economies of scale.
• The larger ships enjoy significant cost
advantages compared to smaller vessels
• It becomes more cost effective to deploy
additional ships at slower speeds as fuel
prices increase.
• Carbon dioxide emission per slot is
significantly lower for this type of vessels
• “The bigger the ship, the better”
2009 – The Crisis
September 2008
Lehman Brothers files for bankruptcy protection,
November 2008
The Eurozone officially slips into recession, the economy
shrank by 0.2% in the third quarter.
January 2009
World economic growth is set to fall to just 0.5% in 2009, its
lowest rate since World War II
May 2009
EU economies will shrink by 4% in 2009, the European
Commission has forecast
June 2009
Japan's economy contracted at an annualised rate of 14.2% in
the first three months of 2009
July 2009
The UK economy contracted 0.8% between Apr-Jun 2009
Overview of World Economy in 2009 / 2008 - GDP
10%
10%
9%
8%
5%
6%
4%
3%
2%
1%
0%
2%
0%
-2%
-4%
-6%
World GDP
-1%
United States
Euro Area
-2%
-4%
Japan
-1%
China
Mid East &
North Africa
2008
2009
-5%
*Source: IMF
2009 – A Year to Forget !
• Global container volumes contracted by 7.7%
• World container fleet increased by 6.0%
• Idle fleet reached 1.5 Mteus (11.6% of world fleet) at the end of 2009
• Accumulated oversupply was estimated at 2.9 Mteus end 2009
• Gross carrier income in 2009 plunged by US$ 79.8 billion (33%) to US$ 161 billion
• All major carriers had negative operating margins in 2009 –US$ 20 billion industry
wide loss in 2009
Nominal Carrier Income (1997 - 2009)
300
40%
250
213
20%
10%
182 185
200
153
150
100
30%
241
161
-10%
118
79
78
81
93
93
0%
-20%
91
-30%
-40%
50
-50%
0
-60%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Gross carrier income ($ billion)
YoY income change (%)
YoY volume change (%)
* Source: Howe Robinson and Alphaliner
Source: Drewry
Supply Outlook
Supply forecast 2010 -2015
12.00%
20,000,000
18,316,000
17,416,000
10.00%
14,997,000
15,741,950
18,000,000
16,454,445
16,000,000
14,201,000
14,000,000
8.00%
12,000,000
6.00%
5.7%
5.8%
5.6%
5.2%
5.0%
4.5%
Slow steaming
8,000,000
Fleet End Year
4.00%
3.8%
2.00%
10,000,000
6,000,000
4.0%
Net Increase
3.10%
4,000,000
Capacity Increase
2,000,000
0.00%
2010
2011
2012
2013
2014
2015
Source: Howe Robinson
• Cellular container fleet capacity is forecasted to have a net growth of 3.1% in 2010,
taking slippage, cancellations, scrapping and slow-steaming into consideration.
• Capacity growth will be limited to 3-6% for the next 5 or so years
* Source: Howe Robinson
Demand Outlook
World Container Traffic Outlook
16.0%
5.0%
6.0%
3.4%
5.4%
4.1% 4.3%
10.0%
8.8% 9.0%
8.2%
11.0%
9.0%
7.0% 6.3%
1.0%
2008
2009
-4.0%
-9.0%
2010 (f)
2011 (f)
Global Insight
Drewry
-7.7%
-7.8%
-9.4%
-10.3%
Clarkson
Howe Robinson
-14.0%
• World container traffic is forecasted to expand solidly in 2010 and 2011, following
a sharp contraction in 2009
• Growth projections vary among well-known market forecasters 5.4% - 9.0% in
2010 and 6.3% - 10.0% in 2011 “as the outlook remains unusual uncertain “
* Source: Global Insight, Drewry, Clarkson, Howe Robinson, IMF
Demand/Supply Outlook
Demand/Supply balance 2009 -2012
3,500
20.0%
2,900
3,000
16.0%
2,200
9.0%
12.0%
9.0%
9.0%
2,000
8.0%
4.0%
2,500
4.0%
3.1%
0.0%
2009
2010
Demand Growth
Net Supply Growth
1,550
6.0%
Oversupply ('000 teus)
3.8%
1,020
2011
2012
1,500
1,000
500
-4.0%
-7.7%
-8.0%
-
• Supply- demand forecasts for 2010 suggest that growth in demand will outpace
fleet growth for the first time since 2005.
• There will be an annual shortfall in capacity of 681,000 teu by the end of 2010,
which will reduce the capacity overhang from 2.9 million teus in 2009 to 2.2
million teus in 2010. This will then translate into a global projected fleet utilization
level of 85% or higher in 2010.
• Capacity overhang may drop to 1.55 million teus in 2011 and 1.02 million teus in
2012, representing global utilization level of 90% and 95% respectively.
• When taking into consideration headhaul/backhaul variances, 2012 is a year
where demand will exceed supply during the peak season on headhaul legs.
* Source: Howe Robinson
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