Page 8 - Al-Rashed Newsletter December 2020

SHIPPING WORLD
SHIPPING NEWS

2020 – A year of a remarkable turnaround for container shipping

With the onset of the Covid-19 pandemic in the first quarter of 2020, it did
not look like being a good year for container shipping, but a very different
picture has emerged in the second half with sharp demand growth on major
trades, a shortage of containers and soaring freight rates.

The year actually started with concern over fuel prices as very low sulphur
fuel oil (VLSFO) prices soared as the IMO 2020 low sulphur regulation
came into force, and for a short while lines that had invested in scrubbers
appeared to have made a very wise decision. However, the surge in fuel
prices was short-lived as oil prices plunged.

By March things appeared to be improving on trades from China, but a
much larger global impact was to be around the corner.

With the world in lockdown and volumes plunging the situation looked grim
for container lines and in April analysts Sea-Intelligence forecast that
container lines could lose $23bn in a worst-case scenario.

Amid all of this South Korea’s HMM started launching the world’s largest-
ever box ships at 24,000 teu in capacity.

By the end of July there some real signs of a turnaround for container lines.
In August the quarterly financial results of lines confirmed a surprising
change in fortunes was underway.

The start of September was to see Maersk announcing it was retiring the
Safmarine brand.

By October it was clear that volumes had surged well ahead of expectations
and that equipment shortages were becoming an issue in key export
locations.

Come to November the impact was clearly being seen on freight rates.

As we moved into December the Asia – Europe trade was booming as well
DID YOU KNOW? as the transpacific

The longest English word is 189,819 As we move to the end of 2020 lines look set to report some of their best
letters long
annual financial results in years, a situation that appeared implausible just a
Blue whales eat half a million calories in few months earlier.
one mouthful

Source: https://www.seatrade-maritime.com/containers/2020-year-remarkable-turnaround-container-shipping