BIMCO's data shows that the global container traffic volume in 2020 will only drop by 1.2% compared with 2019, far exceeding previous expectations. Among them, the container volume in the first six months fell by 6.8%, while the container volume rebounded sharply in the second half of the year, an increase of 4.2% over 2019.
The Far East to North America route has the largest increase. In the second half of 2020, the container volume of this route increased by 3.6 million TEU compared with the first half of the year, and 2.1 million TEU compared with the second half of 2019, achieving a positive growth for the whole year (+1.4 million TEU) . Among the three major routes, the Far East to North America was the only route that achieved growth in container volume throughout the year. The Far East to Europe route decreased by 1.1 million TEU in the first half of 2020, and only increased by 200,000 TEU in the second half of the year. The annual container volume of this route decreased by 5.2% compared with 2019. In the first half of the year, the volume of the Asian regional routes dropped by 4.0%, and only increased by 2.2% in the second half.
The increase in freight volume has pushed up freight rates. In recent months, although the upward trend of spot freight rates on trans-Pacific routes has ceased, the freight rates remain high due to still strong demand.
The surge in demand is not only reflected in the spot market, but also in charter rates. Since June 2020, charter rates have seen a V-shaped recovery, and the rates of all container ship types have been much higher than their pre-epidemic levels. At present, the 1700 TEU feeder ship charter for 6 to 12 months is USD 13,700/day, the 3500 TEU ship type is USD 23,000/day, and the 8500 TEU ship type is USD 42,000/day. Faced with high charter rates, carriers are still trying to obtain more capacity to ensure shipping schedules.
The high demand for shipping capacity means that the volume of ship scrapping will drop sharply in 2020, and a total of 188,800 TEUs of shipping capacity will be scrapped throughout the year. In the fourth quarter of 2020, only 7,448 TEU of capacity was scrapped, and all of them came from feeder vessels, a decrease of 70.9% from the same period in 2019.
At the same time, orders for new ships have picked up, with 65 new ships ordered for a total of 751057 TEU. In 2020, the container fleet capacity increased by 2.9%, adding 857,616 TEU.
Peter Sand, chief shipping analyst at BIMCO, believes that the increase in freight rates in recent months does not mean that the fundamentals of the container shipping market have improved. In the long run, the industry will have to face the problem of overcapacity in the market before the epidemic, and the emergence of new orders in recent months will make this situation worse. But even so, BIMCO predicts that the consolidation market in 2021 will be better than in 2020.
