Daily Briefing March 4 2020
Free to read: Shrinking fuel oil spread cuts scrubber earnings premiums | Forwarders count the cost of coronavirus impact | Equipment shortages hit shippers
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What to watch | Analysis | Markets | In other news
What to watch
The spread between high and lower-sulphur marine fuel oil is contracting, which has slashed earnings premiums for scrubber-fitted vessels.
Kuehne+Nagel expects the coronavirus outbreak to lead to a significant reduction in its China sea and air freight volumes in the first quarter of 2020, with DHL also highlighting that the virus and its secondary effects would have a material impact on its performance.
Shippers and cargo owners in the US and Europe are facing a shortage of empty containers as a result of carriers’ blanking sailings because of lower volumes emanating from China.
Hempel, the Danish paints and coatings business, returned to growth with a 14% increase in full-year revenue to €1.5bn.
Analysis
From the News Desk: The impact of the coronavirus outbreak on the shipping sector will be determined by when the Asian giant’s economic activity starts to bounce back.
China’s largest privately run shipbuilder has fallen victim to the outbreak of the coronavirus outbreak, according to research by OCBC Bank.
Introducing standardised forms and technologies can help carriers reduce costs. But there are fears digitalisation would be put on the back burner as carriers seek to reduce costs in the face of coronavirus.
Markets
French engineering group GTT has flagged up record expansion in liquefied natural gas capacity last year and predicts a jump in newbuilding orders for LNG and ethane carriers over the next decade.
The Panama Canal Authority has reduced the maximum draught of vessels transiting the neo-panamax locks because of drought conditions in Gatun Lake.
In other news
Shippers have been warned of increasing numbers of fraudulent invoices for medical testing services.
Steamship Mutual is offering members a capital distribution after it emerged from the 2020 renewal with 4m gt growth in entered owned tonnage, according to a statement from the International Group affiliate.
Polaris Shipping says it is preparing to retrieve the bunker oil from the stranded very large ore carrier Stellar Banner, as a potential oil leak has been contained.
South Korea’s government has moved to further bolster that nation’s shipping companies and passenger ferry operators amid growing concerns about the economic fallout from the global spread of the coronavirus.
The Cargo Incident Notification System has changed its board make-up, with Evergreen executive YS Hwang taking over the chairmanship from Maersk’s Uffe Ernst-Frederiksen.
Braemar Shipping Services predicted the coronavirus outbreak would hit its earnings amid steep falls in charter rates. But it expects a strong second half of the year and plans new offices in Athens and Geneva.