Daily Briefing June 18 2020
Free to read: LNG shipbuilding loses steam as commodity demand tanks | EU given warning over state support for carriers | Changing attitudes will drive progress, say class chiefs
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What to watch | Analysis | Markets | In other news
What to watch
Leading shipbuilders in South Korea may still miss this year’s target order intake by a wide margin, even with tens of billions in dollars of orders for liquefied natural gas carriers waiting in the wings.
The contentious issue of market distortion through state aid to container shipping companies has raised its head again, with forwarders and terminal operators setting their sights on tonnage tax regimes.
Analysis
The impact of the coronavirus pandemic will continue to be felt in the second half of 2020, with more than 1m teu of capacity due to be pulled from the principal east-west trades.
The coronavirus pandemic has accelerated the pace of digital transformation; it has also exposed certain safety and humanitarian issues that shipping must address urgently. Seafarer fatigue is a safety issue.
Weekly briefing: Transpacific container freight rates have increased due to a shortage of space for cargoes on the back of removed capacity, while a sharp rise in Chinese crude imports is offsetting fewer shipments from the Gulf.
Markets
The capesize market was sizzling once again, with rates soaring to six-month highs. It was boosted by several factors, including record iron ore shipments from Australia to China, as well as a shift in trading patterns from Canada in favour of longer-haul journeys.
Upgrading Southeast Asia’s container port capacity to a level able to support a much-mooted supply chain shift will require an estimated $13bn of investment.
Shipping continues to face challenges across all sectors as a result of the impact of the coronavirus outbreak, according to industry leaders.
In other news
Maersk expects containerised freight volumes to be down by 15%-18% during the second quarter, as the impact of the coronavirus pandemic takes its toll on demand.
Canada’s east coast ports of Montreal and Quebec are continuing their development of new infrastructure aimed at capturing more discretionary cargo bound for the US Midwest.
The US southeast ports of Virginia and Savannah have both been hit hard by the coronavirus outbreak in May, with cargo volumes plummeting by nearly double-digit percentages in both facilities year over year.
The Swedish Club said it is not exempt from the pressures facing the P&I sector as a whole, and a 5% general increase is necessary after a four-year price freeze.
The desire of English courts not to interfere with parties’ right to contract on whatever terms that they wish, and to give practical effect to that agreement if possible, has emerged as broad theme in recent shipbuilding contract cases, according to the authors of the acknowledged leading legal textbook on the subject.
While the coronavirus pandemic has accelerated the uptake of remote surveying, work needs to be done to safeguard its credibility across the industry, according to experts.