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I have been travelling the last week or so in the Middle East and Far East visiting clients and shipping lines and some of my agents in these places. Recovery from the global economic downturn, particularly with shipping lines in the Far East, is now well underway with some carriers forecasting things should be back to normal by the end of the year.
An example is Singapore owned, Neptune Orient Lines(NOL). NOL is the fifth largest container carrier in the world. After reporting a US$741m loss last year NOL expects to deliver a US$70m profit for the full year this year. Furthermore all vessels that NOL laid up to ride out the downturn are now back in service and they intend to start acquiring more. Similarly an even more spectacular turnaround is being delivered by Orient Overseas International who posted a US$1.28b profit for the first half compared with a loss for the same period last year of US$232m.
Maersk Lines, the worlds largest container carrier, has forecast they expect to return to profit this year after seven terrible consecutive loss making quarters.
Most carriers I have spoken to are hoping to be able to gradually increase rates later this year by 10-15% as space contracts on their ships again.
I am really getting the sense now that the pulse of global industry is shifting to Asia with more companies focusing on this region and the extraordinary opportunities and growth that exists here. Some are even shifting their head offices from Europe and the US to the Far East. Obtaining finance from banks and doing business in general, is easier than alot of other places in the world and the economies are less credit driven.
For my industry something that punctuates this for me is that there is a challenger to the Baltic Shipping Index coming out of China that is getting more prominent. It is called the China Containerised Freight Index and provides a benchmark index for container freight rates. At the end of June it had risen to 1171 points compared with 763 a year ago.
All in all things are looking very positive again and I think we'll be back to battling for space on ships again very soon....in fact in a few tradelanes we already are.
All for now,
Brad Skelton
The Shipping Bloke
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@Brad: Could you throw some light on which all companies are recovering from the losses suffered in 2009....and which all factors are making them profitable and driving their revenues??? thanks in advance
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