China's shipping industry has returned to the boom zone after two years

Reporter He Xinrong

Shanghai International Shipping Research Center released a report on the 9th, the third quarter of this year, China's shipping climate index rose 15 points to 101.7 points (100 points for the boom boundary value), in the micro boom range. This is since the third quarter of 2011, China's shipping climate index *** returned to the boom range.

Over the past two years, China's shipping industry has hit a historic low due to slowing global trade and excess shipping capacity. In the third quarter of last year, China's shipping prosperity index fell to 78 points, about 60% of shipping companies fell into A large area of losses, the leader China COSCO lost 9.5 billion yuan that year, ranking A-share losses king.

Since the second quarter of this year, benefiting from the government's "steady growth" policy, China's investment and exports have shown a relatively obvious rebound, which has brought vitality to the shipping market. The BDI index, which represents the level of global dry bulk freight rates, has now risen above 2,100 points, up more than 180 per cent since the start of the year, including a rise of about 80 per cent in September.

The same is true for container shipping. Since July, container shipping companies have tried several times to raise prices, and the spot container freight rate from Shanghai to Europe has risen by more than 100 percent. Galaxy Securities' report pointed out that some shipping companies may turn a profit in the third quarter.

However, the recovery in the shipping industry may not be sustainable. The main reason is that with the economic recovery, China's GDP growth of 7.5% this year is almost certain, and it is difficult to further increase the policy in the later period. At the same time, the rebound in freight rates has attracted new ships to launch, and statistics show that the capacity of the Asia-Europe route increased by about 3% in September, while overseas demand is not stable. The imbalance between supply and demand makes the container freight rate of the Asia-Europe route drop by more than 100 US dollars/TEU in the first week of September.

Shanghai International Shipping Research Center survey shows that the fourth quarter of China's shipping climate index is expected to 99.56 points, once again fell back to the depression range. In the face of this challenge, some shipping enterprises have begun to adjust, and the main means of large ships and alliances are.

Maersk, the world's leading shipping company, is a pioneer in booking large ships. During this year's National Day, the world's largest container ship ordered by Maersk docked in Hong Kong after a three-month voyage. Maersk's jumbo model can carry up to 18,000 TEU, which is 16% higher than the previous world's largest ship capacity of 15,500 TEU, while reducing energy consumption by 20%. "It's not about increasing market share, it's about lowering costs." "Said Gu Dawei, president of Maersk South China.

Due to the obvious cost advantages of large ships, domestic shipping companies choose to follow up. Currently, China Shipping Line has ordered five 18,400 TEU container ships, the first of which will be delivered next year. "Big ships with 10,000 boxes will become 'tickets' for long-distance routes," said Ji Yuntao, a researcher at Industrial Securities.

Huddling for warmth is another direction. In the middle of this year, Maersk announced the formation of an operating alliance called P3 with its two major rivals Mediterranean Shipping and CMA CGM Marine. Prior to this, China Cosco also joined the CKYH alliance. However, P3 is the largest of its kind compared to existing alliances. While stabilizing the market, it will also squeeze the living space of some companies. Whether P3 can pass regulatory approval, including in China, remains to be seen.