Developments in Container Shipping Frans Waals DYNAMAR

The (Financial) sTATE of container shipping

Operating Profit/Loss 2011-15 Container Europe Korea China Taiwan Japan Other Those making profits Those making losses

Net Profit/Loss 2011-15 Container Europe Korea China Taiwan Japan Other Those making profits Those making losses Severe financial problems Weak financial state

Revenues versus costs

Why These Losses? – Low Rates Low trade growth High growth shipboard capacity Increased transparency of the market Lack of self-control from the carriers

Worldwide Trade Volumes Trade (TEU) - 102 → 155 mn Growth (%) - CAGR 4.1%

TEU Fleet Capacity Cap (TEU) - 9.18 → 20.68 mn Growth (%) – CAGR 8.5%

Worldwide Trade vs Fleet TEU Capacity Trade index - 156 Fleet cap index - 226 Cap + slow steaming - 196

Ship Capacity Scrapped/Delivered 2016 - 728,000 TEU scrapped 2016 - 934,000 TEU delivered

Transparancy - Freight Indices CCFI SCFI WCI CTS

SCFI Spot Rates Far East-Europe

Why These Losses? – High Costs Expensive ships Newbuilding 18,000+ TEU 2011: USD 185 million, 2017: USD 140 million Charter oldPanamax 2011: USD 20,000/month, 2017: 4,000/month High debts/financing costs Hanjin collapsed with a debt of USD 5 billion Maersk Line pays almost no interest Quality of management

STRUGGLING FOR SURVIVAL

Actions from the Carriers What has been done? Reducing staff Selling assets Attracting fresh capital End loss-making operations Withdrawing from trades What is being done? Merger/takeovers Bigger alliances

Mergers/Takeovers X

Europe/Mediterranean-Far East North Europe – Far East North Europe – Far East Mediterranean – Far East Before AFter Mediterranean – Far East CKHYE Alliance Coscon “ K” Line Hanjin Yang Ming Evergreen CKHYE Alliance Coscon “ K” Line Hanjin Yang Ming Evergreen Ocean Alliance CMA CGM/APL CoscoSL Evergreen OOCL Ocean Alliance CMA CGM/APL CoscoSL Evergreen OOCL The Alliance Hapag-Lloyd “K” Line MOL NYK Yang Ming The Alliance Hapag-Lloyd “K” Line MOL NYK Yang Ming G6 Alliance APL Hapag-Lloyd Hyundai MOL NYK OOCL G6 Alliance APL Hapag-Lloyd Hyundai MOL NYK OOCL 2M MSC Maersk Line 2M MSC Maersk Line 2M MSC Maersk Line 2M MSC Maersk Line Hyundai Hyundai Ocean Three CMA CGM China Shipping UASC Ocean Three CMA CGM China Shipping UASC Hamburg Sud? ZIM PIL Hamburg Sud? Hamburg Sud Hamburg Sud ZIM PIL

Far East-US West Coast/East Coast Far East – US East Coast Before AFter Far East – US West Coast Far East – US East Coast CKHYE Alliance Coscon “ K” Line Hanjin Yang Ming Evergreen CKHYE Alliance Coscon “ K” Line Hanjin Yang Ming Evergreen Ocean Alliance CMA CGM/APL CoscoSL Evergreen OOCL Ocean Alliance CMA CGM/APL CoscoSL Evergreen OOCL The Alliance Hapag-Lloyd “K” Line MOL NYK Yang Ming The Alliance Hapag-Lloyd “K” Line MOL NYK Yang Ming G6 Alliance APL Hapag-Lloyd Hyundai MOL NYK OOCL G6 Alliance APL Hapag-Lloyd Hyundai MOL NYK OOCL 2M MSC Maersk Line 2M MSC Maersk Line ZIM ZIM 2M MSC Maersk Line 2M MSC Maersk Line Hyundai Hyundai ZIM ZIM Ocean Three CMA CGM China Shipping UASC Ocean Three CMA CGM China Shipping UASC PIL Hamburg Sud? Wan Hai Wan Hai Matson Hamburg Sud Westwood Hamburg Sud PIL/Wan Hai Hamburg Sud? Matson/Westwood SM Lines

Transatlantic Before AFter North Europe – North America Mediterranean – North America Before AFter North Europe – North America Mediterranean – North America CKHYE Alliance Coscon “ K” Line Hanjin Yang Ming Evergreen (n.p.) CKHYE Alliance Coscon “ K” Line Hanjin Yang Ming Evergreen Ocean Alliance CMA CGM/APL CoscoSL Evergreen OOCL Ocean Alliance CMA CGM/APL CoscoSL Evergreen OOCL The Alliance Hapag-Lloyd “K” Line MOL NYK Yang Ming The Alliance Hapag-Lloyd “K” Line MOL NYK Yang Ming G6 Alliance APL Hapag-Lloyd Hyundai MOL NYK OOCL G6 Alliance APL Hapag-Lloyd Hyundai MOL NYK OOCL 2M MSC Maersk Line 2M MSC Maersk Line 2M MSC Maersk Line 2M MSC Maersk Line Hyundai Hyundai CMA CGM CMA CGM ZIM ACL UASC Hamburg Sud Melfi ICL ZIM Hamburg Sud UASC Turkon Melfi ACL Hamburg Sud? Turkon ICL Hamburg Sud Marfret

Topics for the (Near) future

Total fleet: 559 Ships/2,520,000 TEU oldPanamax (4,000-5,100 TEU) Total fleet: 559 Ships/2,520,000 TEU Idle: 112 Ships/550,000 TEU

18,000+ TEU Vessels Delivered: 46 Ships/871,800 TEU On order: 59 Ships/1,155,000 TEU

Devaluation of Ship

The Bachelors

The Unknown Factor

The End