Container lines shift focus from technology to flexibility
The Maritime Strategies International (MSI), a research and consultancy firm, said firms appear to be concentrating more on cost efficiency to cushion the effect of the global economic downturn
With container lines continuing to seek cost savings, MSI Analyst, Jamie Seneviratne, argued that any equipment manufacturer looking to drive innovation must consider how vessels employing their systems can be compatible with other ships operated in the same alliance structure.
“Historically, container shipping has seen some of the most pioneering uses of technology and new vessel designs, with bold movements towards innovation. Pushing the bounds of technology were independent owners who built a series of containerships designed with specific objectives in mind. These ships were built with an eye on sustainable development and efficiency in ways many others had not considered,” he said.
Despite these achievements, MSI said the drive for innovation in container shipping has proceeded at an uneven pace, with technical innovations such as eco-ships and new vessel sizes, have been followed by an increase in ordering. However, the dynamics of the new alliance structures within the industry may challenge the speed, and shape of technological innovation.
“ The containership industry is in a state of transition and whilst some liner companies and owners are trying to embrace and drive change, others have struggled to shift their business model. Liner companies need to find a way to consolidate their operations sufficiently to gain economies of scale, achieve cost synergies and eventually obtain some degree of pricing power,” Seneviratne said.
A Drewry report had earlier said the volatility in container shipping freight rates may remain very high if the over-capacity and carrier industry instability continued. Drewry’s Global Freight Rate Index, a weighted average of spot container freight rates across all major routes except intra-Asia, swung back in July, by 13 per cent to reach $1,403 per 40 feet box. The global spot rate index had dropped to an all-time low of $1,113 per 40ft container in April.
The 26 per cent jump in the global rate index between April and July, according to Drewry follows the recent tendency of ocean carriers to increase rates and to discontinue some unprofitable services on a number of routes.
Among the North-South trades, dismally low rates on the Asia-West Africa and Asia-South Africa routes are registering signs of reversal, with the start of the peak season. Rates from Shanghai to Lagos increased by 11 per cent between May and July.
A major reversal from rock bottom rates was registered on the Asia- South America trade, after carriers reduced the number of weekly services to three since May, causing a 243 per cent increase in rates during March-July.
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