Recently, due to the tight global market and the strategic adjustment of shipping companies, the freight rate of the European route has risen sharply. At present, shipping fees have reached the peak in the past two years, mainstream shipping companies have begun to actively strengthen the deployment of routes, and many shipping companies will increase freight rates and surcharges. Since the beginning of the year, the global supply chain has been hit again due to geopolitical factors, resulting in an accelerated rebound in freight rates.
The shipping industry is known for its strong cyclicality and high volatility, but its sub-sectors are characterized by different cyclicalities. In the current economic environment, the supply of the oil transportation industry has been effectively regulated, and the demand is still growing steadily. Since 2023, oil freight prices have remained in a high volatility range, thanks to the solid foundation provided by the medium-term supply-demand relationship.
Container shipping has just passed a large market cycle, and it may take time to digest a large amount of new capacity and wait for a further recovery in global consumer demand.
The bulk market is greatly affected by Chinese demand, and if economic incentives related to infrastructure construction are introduced in the future, the bulk market is also expected to usher in a recovery that exceeds expectations.
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Overview of the shipping industry
Shipping is the use of ships to transport goods between different countries and regions through sea waterways, which has the characteristics of large capacity, low cost, high adaptability and relatively low speed.
Among the various modes of international transportation, maritime transportation is especially suitable for the international transportation of bulk commodities because of its large capacity and low freight rate.
The shipping industry is typically capital-intensive. Since the value of ship assets is usually very high, and the unit price of some high-end ships and offshore engineering equipment can even be as high as hundreds of millions of dollars, the renewal and expansion of the fleet will greatly increase the capital needs of shipping companies. Considering that traditional financing methods, such as direct investment by bank mortgage companies, are often accompanied by high financing costs, shipping companies are increasingly inclined to choose ship leasing as their financing means.
The resilience of shipping demand and some fragile links in the shipping process have led to frequent upward fluctuations in freight rates.
Elements of the shipping system:
Sorting out the shipping industry chain
The shipping industry is subdivided into three main sub-sectors: oil transportation, dry bulk transportation, and container transportation (consolidation).
Oil transportation is responsible for the transportation of crude oil and refined oil, and is closely related to the petrochemical industry; Dry bulk transportation focuses on the transportation of bulk goods such as coal and iron ore, and downstream customers are mainly from real estate and energy fields; Container transportation is a freight mode with containers as the carrier, and the downstream is mainly the trade industry.
Diagram of the shipping industry chain:
Container shipping
Containers are mainly divided into dry cargo containers, bulk containers, liquid containers and other special containers and general containers.
The concentration of the international container shipping industry has been on the rise in recent years.
The supply side of container shipping mainly comes from the increase in the capacity of new ships. The competitive landscape of the container shipping industry is relatively good, and the main competition venues of the top ten shipowners are in the main routes of Europe and the United States, in addition to Asia, which is the fastest growing subdivision of the international container shipping industry.
In terms of container shipping alliances, three major alliances have been formed at present. Maersk and MSC have announced that they will not renew the cooperation agreement after it expires, which may lead to a reduction in the service capacity of Maersk and MSC, providing new development opportunities for the Ocean Alliance and the THE Alliance.
The benign competition pattern of the domestic container shipping market in mainland China is stable, and the main participating manufacturers include Pan Asia Shipping, China Grain Logistics, Antong Logistics, Jinjiang Shipping, Ningbo COSCO, etc.
More than 40% of the capacity of the head shipowner is 10,000 containers:
资料来源：Alphaliner
Oil shipping
The oil transportation market is obviously cyclical, and its prosperity is closely linked to the growth of the global economy, and when the economic development momentum is good, the demand for crude oil consumption will increase accordingly, which in turn will promote the growth of oil transportation demand.
From the perspective of the global market, the current aging trend of the fleet is obvious. New capacity from 2023 onwards has begun to make up for the gradual withdrawal of capacity due to ageing, and active capacity in the market has reached its peak in 2022.
In terms of industry structure, the industry concentration of the merger of shipping companies Euronav and Frontline has increased. In China, major enterprises include COSCO Shipping Energy and China Merchants South Oil, and China Merchants Shipping, a comprehensive shipping company. #航运##造船##船舶##科技##财经##周期#
Dry bulk shipping
Dry bulk shipping mainly includes key cargoes such as iron ore, coal, and grain. According to Clarkson's forecast, the volume of iron ore and coal shipping is expected to show a downward trend in the period 2024-2025, while the volume of grain and other small bulk cargo is expected to grow rapidly. the impact of the main geopolitical factors of the rapid increase in the second half of 2023; In 2024, the gap between supply and demand in the dry bulk shipping market will be basically balanced.
China is the leader in bulk freight demand, accounting for about a quarter of the global bulk freight turnover, and has a huge influence on the bulk freight market.
Volume structure of dry bulk shipping in 2023:
资料来源：Clarkson
There are many manufacturers related to the upstream and downstream layout of the shipping industry chain, mainly including Phoenix Shipping, Air China COSCO, Ningbo COSCO, Qingdao Port, Ningbo Shipping, COSCO SHIPPING, Rizhao Port, etc.
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