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(05-09-2016, 05:45 PM)CityFarmer Wrote: (03-09-2016, 10:02 AM)BlackCat Wrote: (02-09-2016, 03:45 PM)Greenrookie Wrote: Another link, the freight rate of lines which hanjin is operating surged. I looking at it more at cyclical cycles. Even if GG figurative 7 bear and 3 bull is any guide, the shipping market bottom has been long enough, the bugs boys are also taken out. Textbook tell us, collapse of Giants will lead to rebalancing .... Shipbuilders, charters O@G all bombed. Blood is on the street
Agree that container shippers and leasors are all bleeding now, but I think there is still 2-4 more years of rebalancing to go.
Hanjin has 609,536 teu capacity, about 2.9% of the global containership fleet. 60 chartered ships, and 37 owned. (link) Global container line overcapacity is estimated at 30%. So even scrapping all of Hanjin's ships won't make a difference.
There is still more capacity being added, due to old shipbuilding orders from 2014-15:
As of February 1, 2016, newbuilding containerships ... representing approximately 19.6% of the total worldwide containership fleet capacity ...were under construction. The size of the orderbook will result in the increase in the size of the world containership fleet over the next few years. (Seaspan 2015 annual report, p11)
We need to see a lot more blood in the water, before a recovery. Its a long drawn out process, made longer by zero interest rates.
Based on Fortune, "Hanjin accounts for 7.8% of trans-Pacific trade volume for the U.S. market". Trade volume, is a better gauge than tonnage on impact analysis, IMO.
http://fortune.com/2016/09/05/hanjin-shipping-ships/
IMO, we should consider both scrapped, and pending delivery tonnage, to determine the state of overcapacity. Do we have the scrapped statistic?
Even if we have the scrap statistic, it's still the supply side of the equation. I find it hard as compared to property (population growth, income growth) to determined demand side of equation.
Trade as we know it; is getting weaker, and we know it's partly because of protectionism raising (it's no wonder since distribution of wealth from "growth" has seldom or reach the masses in disportional)
Also, they are so many segments, tankers, Bulks, containers, related to trade that I thought getting "shipbuilder" who can navigate the different segments might be a "better" bet
life goes in cycles, predictable yet uncontrollable; just like the markets, but markets give you a second chance
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An article on demand and supply situation of containers
http://www.hellenicshippingnews.com/cont...companies/
life goes in cycles, predictable yet uncontrollable; just like the markets, but markets give you a second chance
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(06-09-2016, 07:02 AM)Greenrookie Wrote: [quote pid='132812' dateline='1473068753']
Even if we have the scrap statistic, it's still the supply side of the equation. I find it hard as compared to property (population growth, income growth) to determined demand side of equation.
Trade as we know it; is getting weaker, and we know it's partly because of protectionism raising (it's no wonder since distribution of wealth from "growth" has seldom or reach the masses in disportional)
Also, they are so many segments, tankers, Bulks, containers, related to trade that I thought getting "shipbuilder" who can navigate the different segments might be a "better" bet
[/quote]
The unfortunate situation is that all 3 major shipping segments - bulks, containers and tankers are suffering from overcapacity although at different stages. Shipbuilders who benefit from the shipowners capex are unlikely to be in a better shape.
For bulks, the short recovery in 2013 attracted many capitals including the PE firms into the market. They ordered too many vessels at the same time until they realise that it will be a massive oversupply from 2015 onwards. On Feb 2016, BDI reached the lowest point in its 30 years history due to oversupply and CNY being the seasonal low. New orders have plummented, scrapping went up, delivery slippage are slowly improving the situation.
For containers, they are different from the bulk players. Bulk carrier is a highly fragmented market in perfect competition. Containership companies are more consolidated as they do enjoy some form of network effect. Or we can see bulk as taxi and containership as your bus and mrt. The issue with the containerships players is that their mentality is to buy the largest ships with the best fuel efficiency to compete with their peers. Their capex is not because they are bullish on the industry but they want to capture the cost and scale advantage over the smaller players. This explains the persistent overcapacities for the many years despite the consolidation in addition to the fact that some of them certainly has the balance sheet or national support. However, since the oil price has fallen, they have started to realise the big ships are not necessarily economic. The oversupply will take quite a while to clear.
For tankers, they are lucky to have been saved by the contango trade last year. Now that the oil price has started to stabilise, the contango trade disappears and a new wave of supply will start hitting the market until next year. VLCC rates have plunged since mid of the year. In the past, tankers can be converted into bulk carrier and this is unlikely given the situation for bulk.
In addition, the low oil prices have hit all segments. When oil price was high, ships will do slow-steaming to reduce fuel consumption. Slow-steaming helps to remove some of the supply. With the current oil price, there is no incentive to slow-steam and all ships will increase their speed of delivery.
Shipping cycle is unpredictable and the better bets will be on the few astute operators who have kept their costs low and balance sheet healthy.
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IMO, there are two possible meaningful impacts
First, the consideration of customers, might be less on cost, but more on quality. Quality as certainty of shipment, without been caught off-guide by trapped cargo.
Last, and not least, financiers might be tightening the support, on those previously too-big-to-fail customers, thus speed up the belated bloody market consolidation.
What do you think?
Hanjin fall is Lehman moment for shipping, Seaspan CEO says
[LONDON] The fall of South Korea's biggest container line Hanjin Shipping Co is similar to the 2008 collapse of Lehman Brothers Holdings Inc and has materially impacted the shipping industry, Seaspan Corp chief executive officer Gerry Wang said.
...
BLOOMBERG
Source: Business Times Breaking News
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(13-09-2016, 05:04 PM)CityFarmer Wrote: IMO, there are two possible meaningful impacts
First, the consideration of customers, might be less on cost, but more on quality. Quality as certainty of shipment, without been caught off-guide by trapped cargo.
Last, and not least, financiers might be tightening the support, on those previously too-big-to-fail customers, thus speed up the belated bloody market consolidation.
What do you think?
Hanjin fall is Lehman moment for shipping, Seaspan CEO says
[LONDON] The fall of South Korea's biggest container line Hanjin Shipping Co is similar to the 2008 collapse of Lehman Brothers Holdings Inc and has materially impacted the shipping industry, Seaspan Corp chief executive officer Gerry Wang said.
...
BLOOMBERG
Source: Business Times Breaking News
I amNot sure the comparison is appropriate. I am no economist, by Lehman crisis is a uncertainty and breakdown of trust issue. Banks are no longer sure if their loans are being "poison" by the CDO, so everyone keep to themselves, effectively, it is like blood stopping circulation..
I have already read Maersk trying to pick up hanjin slack, so u dun think it is the same. The risk is indiscriminate pulling of plugs by the banks. but with Lehman as a lesson, I am not sure if banks want to create a crisis. The weaker lines might fall further but consolidation is different from Lehman.
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It should be a short-term impact, and will cease over time. Damage is done due to missing of all datelines...
Hanjin crisis brings new headache to U.S. importers; trailer shortage looms
The bankruptcy of Korea's Hanjin Shipping Co Ltd <117930.KS> is causing ripple effects for importers bringing goods from Asian factories to U.S. malls by creating a shortage of trailers to move ocean-shipping containers on U.S. roads.
The world's seventh-largest container carrier has more than 500,000 containers, and many already are clogging up ports and truck yards, tying up trailers that cannot be used to handle other cargo. That is beginning to worry freight handlers at U.S. West Coast ports and is the first sign of knock-on effects from the failure of Hanjin.
The problem stems from Hanjin's shortage of cash, which has stranded $14 billion of cargo owned by companies such as HP Inc <HPQ.N>, Home Shopping Network <HSNI.O> and Samsung Electronics Co Ltd <005930.KS>. Much of the cargo is on more than 100 ships at sea because cargo handlers, tug operators and ports are refusing to work with Hanjin unless they get paid up front.
...
http://www.todayonline.com/business/hanj...tage-looms
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A meaningful step is happening, in market consolidation for shipping sector? It will also mean lesser order for shipbuilders in near term...
Maersk may target Hanjin, Hyundai in new acquisition strategy
27 Sep 2016 06:55
[COPENHAGEN] AP Moeller-Maersk A/S's??container line, which this month ditched a strategy of building new vessels and will instead try to grow through acquisitions, is targeting South Korea's two biggest shipping firms, according to Jefferies International Ltd.
Hanjin Shipping Co last month filed for bankruptcy protection and Hyundai Merchant Marine Co is in the middle of a creditor-led debt-restructuring program.
Both are in need of a strong partner and Maersk Line,??the world's biggest, is probably the only rival with the financial muscle to manage a takeover, David Kerstens, Jefferies's transport analyst in London, said in an interview.
"Maersk, as the market leader, will definitely participate in the consolidation - they will have to," Mr Kerstens said. But "the takeover options for Maersk are fairly limited, as most container lines are already tied up in alliances or are family or government-controlled. The most likely scenario is that Maersk would take over the assets of Hyundai and Hanjin."
...
BLOOMBERG
Source: Business Times Breaking News
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ports will also be affected with bigger shipping lines having a bigger bargaining power.
http://www.businesstimes.com.sg/companie...g-terminal
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All are looking for bargains...
Cosco eyes Hanjin terminals after $1 bil Abu Dhabi deal
SHANGHAI/SEOUL (Sept 29): China Cosco Shipping Corp., owner of Asia’s biggest container-shipping company, said it could consider buying some container-terminal assets of the troubled Hanjin Shipping Co. after agreeing to spend US$738 million ($1 billion) on a new port in Abu Dhabi.
"We would like to study if it’s put on the table and if there’s a willingness to sell" on Hanjin’s part, Chairman Xu Lirong said in Shanghai late Wednesday. "So far, it’s not on the agenda."
...
http://www.theedgemarkets.com.sg/sg/arti...dhabi-deal
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Charter owners, terminal operators and container lessors top Hanjin creditor claims
http://www.hellenicshippingnews.com/char...or-claims/
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