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Less need for big containerships with changing trade patterns

SEABURY Consulting's director of Maritime Michel Looten expects China's shifting trade patterns will reduce the transport market share of container lines' long-haul services, thus reducing= demand for mega ships.

Speaking at the TPM Asia conference in Shenzhen, Mr Looten said China remains the dominant factor for the global box shipping industry despite its slowing economy, with nearly one in two TEU in seaborne trades touching the country last year.

While developed countries still capture the bulk of China's exports, the growth is now actually driven by emerging economies, he said.

Seabury predicts 4.4 per cent average annual growth in China's exports to Southeast Asia between 2015 and 2020, three per cent to Africa and 2.7 per cent to the Middle East and the Indian subcontinent, whereas the growth to North America and Europe is forecast at only 1.8 per cent and 0.8 per cent respectively, reported Lloyd's Loading List.

Mega ships, especially ultra large containerships, will likely be less attractive for carriers when it comes to new orders in future, Mr Looten said.

His comments chime with those of international supply chain expert Pierre Cariou, who is a senior professor in Shipping and Port Economics at Kedge Business School in Bordeaux and a visiting professor at the Shanghai Maritime University and World Maritime University.

'Shipping lines will have to come to terms with the geographical shifts in world trade flows," he said. 'Asia-Europe and transpacific trade lanes are no longer posting dynamic growth, which is now to be found on intra-Asia, India and Africa routes."

Mr Cariou said the implications of 'near-shoring" or 'right-shoring" were other factors for carriers to contend with, and the recent failure of Hanjin 'is likely to contribute to the acceleration of a process already well underway, which sees shippers shortening their supply chains to reduce costs and risk."