In March, the order volume reached the highest monthly level in 10 years, and the order volume in the first quarter was higher than that of the whole year in the past six years... The optimistic outlook on the future market and the unprecedented huge profits drive the "arms race" of "Crazy" booking and expansion of container shipping giants seems to be far from over.

New ship orders hit a 10-year high

According to the statistics of the Baltic International Shipping Association (BIMCO), the total number of new orders for container ships in March 2021 was 72, about 866000 TEU, a new high in recent ten years, almost close to the total number of orders in 2020. This figure is also much higher than the previous record of 50 ships with about 570000 TEU in June 2011.

It is worth mentioning that up to 45 container ships in March were super large container ships of 15000 TEU and above, while the number of orders for small and medium-sized ships was only 27.

In the first quarter of this year, the order volume of container ships has reached 1398000 TEU, not only exceeding the order volume of 995000 TEU in 2020, but even higher than the annual order level in the past six years. At present, the proportion of orders held by container ships in the existing fleet has jumped to more than 15%, and this proportion has been maintained at the single digit level for most of last year.

According to BIMCO data, from October to December last year, almost all new orders for container ships were 23000-24000teu ships of the largest specification, and only 4 of the 23 orders for super large container ships were not of this specification. From 2021 to now, among the new orders of 81 container ships of 11800teu and above, only 4 have specifications exceeding 15500teu.

The profit of container transportation company reached an all-time high

Behind the record "Crazy" booking of container shipping companies, they are supported by the same record performance. In the fourth quarter of last year, the container transportation industry handed over the brightest "report card" in history, and the performance of the container transportation company in the first quarter of this year will go to a higher level.

Blue alpha capital, an American consulting firm, said in a recently released report that in the fourth quarter of last year, the net profits of 11 major container shipping companies that reported profits totaled US $5.8 billion. Assuming that other consolidation companies such as Mediterranean Shipping (MSc) that do not disclose their profits have also achieved similar results, it is estimated that the cumulative net profit of major consolidation companies in the fourth quarter will reach an amazing $9 billion.

Blue alpha capital pointed out: "among almost all measurement indicators, the performance in the fourth quarter of 2020 is the best quarterly actual performance in the history of the centralized transportation industry."

According to the estimation of blue alpha capital, the net profits of 11 container shipping companies that announced their profits in 2020 totaled US $10.2 billion, and the total net profits of all major container shipping companies were estimated to be US $15.8 billion, which is at least the best annual performance of the industry since the financial crisis. This figure is almost twice the total profit of about US $7 billion made by major container transportation companies in the previous five years, and many container transportation companies have suffered year-on-year losses during this period.

With the sharp rise of spot freight rates and higher contract freight rates, container shipping companies may make higher profits in at least the first two quarters of this year. Previously, COSCO Haikong, as the listing platform of COSCO Shipping Group's container shipping service supply chain, issued a performance forecast for the first quarter of this year. It is expected that the net profit will reach 15.45 billion yuan, which is not only 50 times higher than the net profit of 292 million yuan in the same period last year, but also more than the total profit of 9.927 billion yuan in 2020.

The centralized transportation market is expected to continue until 2024

In fact, the performance results of the container transportation company in 2020 completely reversed the expectations before the outbreak of the epidemic. Alphaliner said: "the final performance in 2020 is consistent with the pessimistic forecast made in the middle of the year. At that time, some analysts were worried that the centralized transportation industry would have a net loss of up to US $10 billion in 2020."

John McCown, founder of blue alpha capital, believes that the recovery of the container transportation industry is due to the unexpected excessive reduction of transportation capacity supply by many container transportation companies at the beginning of the epidemic“ The container shipping company immediately took positive action to reduce the transportation capacity by reducing the number of voyages. ", Industry integration in the form of alliance "makes this easier to achieve in logistics" and "facts have proved that many routes have excessively corrected the transport capacity, resulting in the demand seriously exceeding the supply".

The latest shipping report of Jefferies, an investment bank, points out that at present, the container freight rate is close to the highest level in history. The Shanghai export container freight rate index (SCFI) is about US $2600 / TEU. Although it is 10% lower than the high point in mid January, it is still 190% higher than the same period last year, and 25.3% higher than the average level in the first week of April in the past five years.

Jefferies said: "last year, the average price of SCFI reached a record $1234. We expect the situation to be much better in 2021 because the high demand for goods continues."

Torsten Holst Pedersen, chief operating officer of seaspan, the world's largest independent container ship owner, recently said that he is very confident in the current centralized transportation market, which is also the main reason why the company has ordered 37 large container ships since the second half of last year. Since the end of last year, the company has placed orders in the new shipbuilding market. So far, it has ordered a total of 37 super large container ships and purchased several container ships.

Seaspan believes that the fundamentals of the container transportation market will remain strong in the next few years. Torsten Holst Pedersen said that the hot market in the centralized transportation market may last until 2023-2024. This is not only due to the exceptional market conditions brought by COVID-19, but also one of the main reasons is based on the long-term development of the market - new ship orders are few.