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MarketPulse

Market Pulse – 2023 Week18

Register Free Trial [https://www.linerlytica.com/register/?utm_source=W202318] Market sentiment turned negative ahead of the Labour Day holidays, with the SCFI dropping by 3.6% in the last week of April, reversing part of its mid-April gains. Charter rates and second hand containership prices continued to strengthen despite the softening freight rates heading into the summer season with significant uancertainty over the direction that the market will take in the next 3 months amidst growing ind

Companies

COSCO 1Q earnings benefited from sharp OPEX fall

COSCO provided full 1Q results after market on Friday (28 April) in addition to the EBIT, Net Profit figures already provided in an alert on 4 April. In the new disclosure, operating expenses in A-share accounting fell by 41% YoY while the volume fell by only 12% YoY. In our estimate, COSCO slot costs (annualised opex/capacity) fell 47% YoY in 1Q23. We will compare COSCO’s OPEX with the industry peers when more peers’ figures are available.

Companies

ONE's 1Q earnings dropped 56% QoQ and suspended guidance

ONE reported its 4Q earnings for fiscal year 2022, which is 1Q23 on calendar year, during lunch break last Friday (28 Apr) with net profit down 56% QoQ and 76% YoY. Though, such quarterly results were still better than any quarter before 2021. The average unit revenue earned by ONE fell just 38% YoY whereas CCFI dropped 68% YoY as ONE likely benefited from higher contract mix and more diversified route mix than the CCFI, which is based on all China origin cargoes. ONE management has not prov

Markets

China's April PMI Export Order suggests softening container volumes ahead

China's April PMI New Export Order came out as 47.6 on 30 April, suggesting Chinese export order experienced sequential contraction in April comparing to that of March. Reading through to the volume, the China PMI export orders suggests container volume may experience sequential softening in May or even June relative to the previous months. Though, it is important to read this data bearing in mind that China could be losing export market share to the ASEAN exporters (read here [https://www.liner

Services

4 carriers launch China-Malaysia-Vietnam service

Maersk, KMTC, SITC and TS Lines are teaming up to launch a new NEA-SEA service that is branded respectively as the IA-68, CMV, FEM3 and CMV. The new service will call at Qingdao, Shanghai, Ningbo, Port Klang, Penang, Ho Chi Minh City, Shekou, Incheon, Qingdao and is scheduled to start on 9 May 2023, using 4 ships of 2,400-2,500 teu on a 28-days round trip. The following 4 vessels will be deployed initially on the service: * 2,433 teu SITC NANSHA will phase in on 9 May at Qingdao; * 2,556

Markets

UPS latest update bearish

UPS share price dropped by 10% overnight (Apr 26) on bearish management guidance particularly on the domestic package, which offers a read-through to the demand for container shipping. On what may indicate the latest development of US retail sales, UPS's domestic package volume dropped 5% YoY in 1Q 2023, an acceleration from the 4% YoY drop in the previous quarter. Moreover, management in an CNBC interview suggested that the decline in the domestic package volume accelerated markedly during Ma

Companies

K&N EBIT/GP Conversion Rate Up in 1Q 2023

K&N reported yesterday (25thApr). The YoY drop in revenue, profit and volume in the group results, and the sea and air segment are no surprises. But the sequential rebound in EBIT/GP conversion rate for Sea Logistics was exceptional given the deterioration of the container shipping market during 1Q 2023. One reason that we figure was that the drop in the freight rates in contracts between K&N and the liners may have come steeper than the drop in spot rates that K&N is selling to the market durin

MarketPulse

Market Pulse – 2023 Week17

Register Free Trial [https://www.linerlytica.com/register/?utm_source=W202317] No sooner had the transpacific rates rebounded than the carriers started to cut rates again, in a pattern that will likely be repeated over the coming months. The SCFI spot rates to the US West Coast slipped 2% last week after rising by 29% a week earlier. Another attempt to raise freight rates will be made in mid-May, with carriers already deferring the 1 Mayaa GRI due to the Labour Day holidays as cargo volumes are

Services

CMA CGM/ANL launch standalone SE Asia-West Australia C loop

ANL, CMA CGM's Australia based subsidiary, has launched a new South East Asia Australia - West C. loop on 18 March 2023 using 3 ships of 1,700-1,900 teu. The service will operate in competition with the ONE/Maersk/Hapag-Lloyd service that ANL was initially slated to join. The South East Asia Australia - West C. loop calls at Port Klang, Singapore, Fremantle, Port Klang using the 1,740 teu ELA, 1,809 teu GREEN WAVE and the 1,930 teu PALAWAN. The service operates in competition with the Hapag-Ll

Services

Containerships Launches BLX

Containerships, the intra-Europe short sea subsidiary of CMA CGM, is launching a new Baltic Express (BLX) service that will call at Bremerhaven, Hamburg, Gdansk, Klaipeda, Riga, Norrkoping, Bremerhaven as an expansion of the Poland Express (PLX). The two vessels, the 1,404 teu HEINRICH EHLER and 1,638 teu BALTIC TERN, currently deployed in th PLX will be redeployed on the BLX. HEINRICH EHLER will start BLX on 1 May 2023 at Bremerhaven followed a week later by BALTIC TERN.

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