Speaking at the Shipping Watch seminar, Andrew Penfold, of Ocean Shipping Consultants, said pressure on terminals would increase and that any negatives could lead to some ports being dropped and cargo transhipped.
Moreover, Mr Penfold said it was “no technical jump” to building ships of up to 24,000teu, with a length of 430 metres and a beam of 62m, so terminals also needed to begin preparing for the arrival of these behemoths.
Following a lull in vessel ordering, he thought it was “extremely likely” that a new round of orders for ULCs could begin by 2015 or 2016 from carriers obsessed with driving down costs still further.
Whether these newbuild orders would be for ships 24,000teu in size remains to be seen, but the history of containerisation tells us they will eventually be built.
A previous speaker, Martin Dixon, head of research products director at Drewry transport consultants, said it was “all about costs” on the major tradelanes of the world, and that this was the main driver for ocean carriers that had failed so far this year to lift average freight rates to sustainable levels, despite raft after raft of GRI announcements.
Mr Penfold suggested that this “one-tracked” view by carriers of cost reduction was a “defence mechanism”, while Mr Dixon added that there was now less correlation between normal supply and demand factors and freight rates.
For example, in 2013, capacity had been tightened by judicious carrier management, including blanked sailings, yet freight rates still fell and remained stubbornly low – a situation Drewry anticipates again this year.
As one would expect, the Chinese veto of the P3 alliance was the main focus of attention at the session.
Anthony Woolwich, a partner at law firm Holman Fenwick Willan, said further clarification of China’s Ministry of Commerce decision to block the P3 without allowing an appeal was necessary before making a full analysis of the ruling; but it was the first example of a heavy-handed reaction by regulators to container line alliances which had hitherto been dealt with sparingly.
Some speakers believed that far from alliances being dead as a consequence, they were here to stay. Indeed, there is speculation that the world’s biggest carriers may revisit the vessel-sharing proposal with a P2 proposal that would reduce the 47% market share dominance of Asia-Europe that motivated the Chinese authorities.
Cas Pouderoyen, senior vice-president global ocean freight at Agility, said there were a number of positives for shippers from carrier alliances, suggesting more direct calls and fewer carriers required as two examples.
He said Agility, which ships 650,000teu a year as an NVOCC, needed to make rate deals with only one or two carriers per alliance to be sufficiently covered.
Although antitrust laws forbid any discussion on rates, Mr Pouderoyen said, he knew that load factors and slot utilisation were key drivers in how shipping lines made decisions on upholding GRIs, and that this was visible to their vessel-sharing partners.