Freight rates pick up! Spot rates on Far East routes rise

NO.1 Pan Ocean first half results release

Recently, South Korea's Pan Ocean Shipping (Pan Ocean) released the first half of the results of the announcement, the company achieved operating income of 2.2211 trillion won in the first half of the year (about 1.66 billion U.S. dollars), a year-on-year decline of 29.8 per cent; to achieve an operating profit of 237.6 billion won (about 1.78 billion U.S. dollars), a year-on-year decline of 41.7 per cent.

Pan Ocean Shipping said that the company's first quarter results deteriorated due to a plunge in the Baltic Dry Bulk Integrated Freight Index (BDI). The BDI averaged 1,004.7 in the first quarter, down 51 per cent from 2,041 in the first quarter of last year and 34.0 per cent from 1,523 in the fourth quarter of last year.

Entering the second quarter, the maritime market sentiment still failed to recover effectively, with the average BDI value of 1,313, a year-on-year decline of 48.1 per cent. Affected by the deterioration of the maritime market and other factors, the Company's performance in the first half of the year continued to be sluggish.

NO.2 Nearly 600 ships! Rapid growth in the number of battery-powered ships

As the world endeavours to reduce its dependence on fossil fuels, battery-powered ships are increasingly being seen as a viable alternative to traditional diesel-powered vessels.

According to the Maritime Battery Forum, nearly 600 ships in operation worldwide have adopted batteries as part of their energy solution, and a further 190 newbuilding orders will use batteries.

Relevant data from Det Norske Veritas also show that there are 589 battery-powered vessels in operation and an additional 208 newbuilding orders for battery-powered vessels. Of these, car and passenger ferries account for the largest share, with 253 vessels in operation using batteries and 91 newbuilds battery-powered. These were followed by offshore supply vessels, cruise ships and fishing vessels, as well as vessels classified as engaged in "other activities".

NO.3 Spot rates on Far East routes rise

Containerised shipping prices on the three main export routes in the Far East have risen significantly as a number of liner companies have again increased their General Rate Increase (GRI) surcharges.

From the end of July, the Far East to Northern Europe route has seen a sharp rise in freight rates, up $500, or 39.6 per cent, from levels below $1,500/FEU, narrowing the spread between this route and the Far East to Mediterranean route to $670, the smallest spread so far this year.

Meanwhile, rates on the Far East to US West route have also shown steady growth in recent months, rising by $470 in the month from 1 July to 1 August. Since the end of June, the average spot rate has risen by 51.5 per cent.

Sand noted that the price climb comes ahead of the peak season and a new wave of contract bids. But fundamentals remain weak, and it remains to be seen whether the gains will be sustained, depending in large part on whether the short-term boost in freight rates translates into lasting gains and how it affects the GRI adjustment for September.

NO.4 53 ships on order in the first seven months! Car Carrier Industry is Hot

Global newbuilding orders for car carriers (PCCs) reached 53 vessels totalling 436,000 spaces and 1.255 million deadweight tonnes in January-July 2023, up 44.0% year-on-year in terms of deadweight tonnes, according to Clarksons data.

The newbuilding market for car carriers in 2023 experienced a high start and then gradually recovered. Among them, January had a hot start, reaching 20 ships, 174,000 cargos and 520,000 dwt; April and May had fewer orders; and the market improved in June and July, with 11 ships and 219,000 dwt in June and 8 ships and 185,000 dwt in July.

In terms of shipowners, the top five shipowners in terms of orders placed were Grimaldi Group, SAIC Angie's Logistics, Leno Shipping, Ray Car Carriers, and Sallaum Lines, with orders of 294,000 dwt, 210,000 dwt, 101,000 dwt, 84,000 dwt, and 80,000 dwt, respectively.

From the shipyard point of view, the top five shipyards receiving orders are China Merchants Jinling (Nanjing), China Merchants Heavy Industry (Jiangsu), Shanghai Waigaoqiao, Guangzhou Shipbuilding International and Jiangnan Shipbuilding, with orders of 338,000 dwt, 311,000 dwt, 144,000 dwt, 126,000 dwt, and 90,000 dwt, respectively.

NO.5 100 New Ship Orders Transacted Globally in July

In July, 100 new ship orders of 9.73 million dwt were transacted globally, with the volume of new ship orders continuing to rise, by 20.3% in terms of dwt.

Container ships still accounted for the highest proportion of new ship orders in July, accounting for nearly 50% of all orders in July in terms of deadweight tonnes.

In July, China continued to be the world's largest recipient of orders, accounting for 40.9 per cent of all orders in terms of deadweight tonnes.