Global container shipping lines rebound from Covid-19 impact

Finally, global container shipping is showing a strong rebound, leaving behind the Covid-19 pandemic, according to the finances of the world’s two largest container shipping companies – AP Moller-Maersk and CMA-CGM.

During the third quarter ended September 30, 2020, both global shipping lines saw improved volumes compared to the previous two quarters. Both are active in India. Any impact on global shipping will also have a cascading effect on Indian trade, industry experts have said.

In the fourth quarter, maritime activity should be more sustained than in the third quarter due to the continued increase in volumes. This dynamic is particularly marked in the United States and Latin America and allows the fleet to continue to operate at full capacity as in the third quarter.

The CMA-CGM Group, when announcing the third quarter financial results, said that the volumes transported during the third quarter of 2020 continued to recover and increased by 16.8% compared to the second quarter of 2020. Volumes were also up 1% from the third. quarter 2019.

Easing of confinements
The increase in transported volumes is due to the recovery in global economic activity following the easing of various containment measures; the strong dynamic of consumption of goods encouraged, in certain localities, by support systems; strong growth in e-commerce with inventory rebuilding and the usual seasonality of activity in anticipation of consumption peaks in September and Christmas in Western countries.

During the third quarter, AP Moller-Maersk improved profitability across the business and generated strong free cash flow, despite the negative impact on global economies from the Covid-19 pandemic.

Global container demand growth is expected to contract by 4-5% in 2020 due to the pandemic. Organic volume growth in Ocean is now expected to be slightly below average market growth, whereas it was previously in line or slightly below market.

“Our progress in earnings and our transformation allows us to look forward to the extraordinary 2020 with confidence. However, we remain well aware of the high level of uncertainty that the pandemic and associated lockdowns continue to pose in the coming quarters,” said Søren Skou, CEO. of AP Moller – Maersk, in a press release.

Charter rates are improving
Commenting on the rebound, Sai Krishna, Assistant Vice President of ICRA Limited, the global container shipping industry has seen significant improvement in charter rates in the current financial year, despite the impact of Covid-19 . This can be attributed to the ability of global container shipping companies to better manage supply during the recession, helped by the consolidation that has occurred in the industry over the past few years and the top 5 companies controlling around 65% of market share.

In the third quarter of fiscal 2021, fares remained healthy and demand also began to see a recovery, particularly on transpacific routes. Nevertheless, Indian players are limited in this segment and operate mainly in cabotage. They should also benefit from the segment’s high rates, he said.

The third quarter outstanding is only regained on the deficit of the last six months, there is now a void for empty equipment, hence the escalation of freight.

“Overall, we observed a decrease of 10% in imports and 5% in exports. After seeing the worst, now is the time to rebound for positive growth, which is a good sign for India as well as for global trade,” said Ennarasu Karunesan, Founder and CEO of UMK Group, an international expert. ports and logistics.
Source: The Hindu Industry