The
first two quarters of the fiscal year 2013-14 has seen a marginal drop in
container throughput for both Importers & exporters, year on year. However
owing to the favorable exchange rate vis a vis USD in the third quarter, the
Indian manufacturing industry has gained, giving a boost to exports. This is
however not the case for the importers on whom the exchange rate has had an
adverse impact.
The
freight rates have been under pressure all through 2013. Even trade lanes such
as India to East Africa which were profitable trade lanes in 2012 became
unviable in 2013 with the rapid decrease in freight rates.
We have seen an imbalance of trade, fall in exports with supply of vessels out
numbering demand. All in all 2013 has not been a healthy year for liner
business.
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| Captain Anand Chopra. |
Expectations in 2014
With
new less tonnage coming in, It is expected that in 2014, the supply demand
equation will even out With Indian export on the rise freight rates may hold or
even improve slightly.
However
this may be short lived owing to the P3 alliance formed by the 3 largest
container ship operators
namely Maersk Line, Mediterranean Shipping Co & CMA- CGM. The service is
planned to commence around mid-June 2014. This will be operated by vessels of
size between 14000 to 16000 TEU’s and is expected to capture about 40 to 45 %
of the total market share. This may have a negative impact on the freight rates
which may again come under greater pressure.
With
the P3 alliance the manner in which the shipping business is carried out in
future may undergo a change. In order to be competitive & retain market
share other major carriers will similarly have to form alliances which again
may result in a rate war. Thus, 2014 will not have any remarkable change in the
freight rates and will continue to be under pressure.
The
upturn in shipping business may come around in 2015 as there will be negligible
new tonnage addition and the alliances would have stabilized. This would have a positive impact on freight
rates.
Second half of 2015 in all likelihood will
result in better times for the shipping industry which has gone through some
very hard times for far too long from second half of 2008 onward.
Will the smaller Ship operators be able to sustain
till then ? Only time will tell.
About the writer:
- Captain Anand Chopra
- Director – Liner and NVOCC
- Doehle Danautic India Pvt Ltd
An
internationally laden shipping background and vast experience in shipping
businesses’ specializing in movement of project cargo and sensitive cargo
across the globe. Captain Anand Chopra
successfully launched and managed SCI’s businesses’ across the USA, Europe, Far
East, Middle East and Africa, thus making a strong case representing a living
legend in the shipping fraternity.
In
his current capacity at Doehle Danautic, Capt. Anand Chopra is the Director of
the Liner & NVOCC vertical and is responsible for expansion of Freight
Forwarding and Logistics businesses’ for Doehle Danautic. He brings immeasurable global industry
knowledge automatically catapulting Doehle Danautic as a leader in this space amongst
its competitors.
