Drewry to release container forecaster report soon

September 28, 2021: Drewry will be launching its latest edition of Container Forecaster, a container carrier industry maturity and risk matrix, to look at the changing risk profile of the carrier industry.

Drewry, an independent provider of research and consulting services to the maritime and shipping industry, will look at the industry from multiple angles including supply-demand balance, carrier profit margins, asset prices, freight rates, consolidation, relative order book and CO2 emissions.

"The Drewry Container Forecaster will identify major changes underway using a traffic light system, showing which ones are favourable or adverse to ocean carriers, and the key risks and opportunities for carriers - whether market-driven or regulatory," the statement added.

Simon Heaney, senior manager, container research at Drewry, said: "At the time of writing in mid-September 2021, total year-to-date new vessel orders stood at 3.9 million TEU, which with more than three months remaining, has already surpassed the previous annual record of 3.3m TEU set in 2007."

Heaney told ITLN that carriers and owners have built up a huge pile of money and a degree of fleet renewal was necessary, especially with greater need for eco-ships.

According to Drewry estimates, in the first half of 2021, ocean carriers and tonnage providers ordered a record $20.1 billion worth of new containerships.

"A look at the supply side of the container shipping market confirms carriers' desperation to get hold of tonnage," Peter Sand, Chief Shipping Analyst, BIMCO, wrote earlier this month.

"Looking at the shipbuilding yards, 386 ships with a total capacity of 3.4 million TEU have been ordered so far this year. This has filled the yards for 2023 and 2024, when 1.6m TEU and 1.5m TEU, respectively, are scheduled for delivery. A further 375,000 TEU is already scheduled for delivery in 2025 as delivery earlier than this becomes harder to secure."

As many as 146 container ships with capacities of 13,000-16,999 TEU and a total capacity of 2.1 million TEU have been ordered so far this year, Sand added.

Arjun Batra, group managing director of Drewry, said recently at the Marine Money conference in Singapore that industry players looking to buy new vessels at current prices will likely find themselves "overextended".

BIMCO is expecting the container market to remain strong well into 2022. "Even as consumer demand for containerised goods begins to ease, there will be plenty of work to be done in clearing the backlog that has built up over the past many months, and lots of stocks that need to be restocked," Sand said in his update. "The true test for the container shipping market will likely come in 2023 when the huge volumes of newly built shipping capacity ordered over the past year start being delivered. Once this happens, the strength of the contracts currently signed may be tested as shippers and carriers, attracted by lower freight and charter rates will try to get out of their obligations, as is always the case when a market recalibrates to a very different level."

The situation may get worse before it gets better, Sand warned, adding that as long as China continues to pursue a zero-tolerance Covid elimination strategy, "the risk of more ports being closed or disruptions to hinterland connections remains high, adding to the time it will take for the container shipping market to normalise."

Supply chain disruption has worsened rather than improved, Heaney added, "not helped by extreme weather events and Covid outbreaks at ports being met with extremely strict measures. The only positive is that freight rates are probably peaking now that some carriers have frozen further spot rate increases. Others are expected to follow but this doesn't mean prices will come off their very high platform any time soon."