1. Drewry “Container Forecaster”
Webinar presentation
Neil Dekker – Director, container research Philip Damas – Director, Supply Chain Advisors
October 23rd, 2014

2. Agenda
1. About Drewry
2. Latest demand developments and trends
3. Latest supply developments and trends
4. Trade routes
5. Freight rates and financials
6. Q & A

3. About Drewry

4. Global container demand 2012-2015
Forecast development of world container traffic (millions teu)
Port handling
% change
World cntr traffic
2012
621.9
4.5%
169.6
4.0%
2013
644.0
3.6%
176.5
4.1%
2014
677.3
5.2%
185.6
2015
714.5
5.5%
195.8
1Q14
159.1
5.1%
43.6
2Q14
168.2
46.1
3Q14
178.1
5.4%
48.8
4Q14
172.0
4.7%
47.1
1Q15
166.3
45.6
4.6%
2Q15
177.3
48.6
3Q15
189.0
6.1%
51.8
4Q15
181.8
5.7%
49.8
Source: Drewry Container Forecaster
Global demand is progressing quite well
2014 is much better than expected – temporary inventory restocking
Emerging regions/routes disappoint
Europe-ECSA 1H14 minus 1.9%
Asia-ECSA 1H %
South Africa 1H14 minus 5.2%
Intra-Asia 1H %

5. Annual deliveries to end 2016 – supply pressure
As of July 2014
104 x 8,000-10,000 teu vsls and 139 x ULCVs
Orderbook stands at 3.4 million teu
55% is for vessels of over 10,000 teu capacity
68.3% is for delivery by end 2015
Ave size vessel in orderbook 7,584 teu
Orderbook is 19.5% of existing fleet capacity
53 x ULCVs to be delivered in 2015 and 45 in 2016
Source: Drewry Container Forecaster

6. The container orderbook
The orderbook still has some steam in it
K Line , Cosco ordered 14,000 teu ships
MSC will charter 5 x 19,000s
G6 lines to order up to 12 x 18-20,000 teu units….
Maersk has 425,000 teu in the pipeline…
$15.4 bn of orders in 2013, $9.5 bn ytd in 2014
Source: Drewry Container Forecaster

7. Trade Routes analysis WB Asia-Europe & EB Transpacific Trades
Asia-N Europe:
After a poor CNY period, volumes have unexpectedly ramped up by 8.8% yoy (end August)
Carriers have enjoyed a good peak season 2
Asia-North America:
Volumes have significantly increased
since Q2 – up 6.5% yoy (end August)
Vessels have been full throughout the
Summer months, but there have been
problems caused by the new port
contract negotiations
Source: Drewry Container Forecaster

8. East-West trade route analysis-freight rates
Weekly spot freight rates Jan-Oct 2014 versus 2013 2
Average weekly 2013 rates:
Asia-N Europe $2,098 per feu
Asia-USWC $2,084 per feu
Asia-Med $2,171 per feu
Average weekly 2014 rates:
Asia-N Europe $2,488 per feu
Asia-USWC $1,932 per feu
Asia-Med $2,892 per feu
Sources: Drewry Container Forecaster, World Container Index

9. Benchmarking Club Update (contract freight rates)
Contract freight rates fell by 6% on major East – West routes
Between March and July 2014
Based on contract freight rate data per 40ft
Provided by Asian / American / European Retailers and Manufacturers across the FMCG / Industrial / Chemical industry sectors
Shipping annual volumes from 3,000 to 300,000+ TEU
Reduction follows renewal in May of many transpacific contracts
At lower rates
Driven by reduction in unit cost for the container carriers
Shippers centralising their contract negotiation tenders 6%
Benchmarking Club provides in-depth analysis of contracted rates
to its members
Reports tailored to Members’ specific routes
Comparison of average / high / low rates, also by Shipper size (Small / Medium /
Large)
Confidential data input
Open to Importers and Exporters

10. Benchmarking Club Update (contract freight rates)
Confidentially benchmark your contracted rates against your peers
Importers and Exporters, excludes Freight Forwarders / NVOCCs
Membership remains anonymous (except to other members)
Benchmark is based on:
Dry container equipment
20ft, 40ft, 40ft HC
Major trade routes covered
Port to Port, Port Range and Region comparison
Membership includes
Quarterly individually tailored confidential reports
Free site licence to the Container Freight Rate Insight
Two Outlook Briefings
Two Best Practice Webinars
For more information contact Philip Damas or Cath Earl on

11. Carrier profits and unit costs
Some carriers
will be in the
black this year.
The industry may
make $5 billion.
Most carriers are
driving down unit
costs, but average
revenues are
weak.
Contract freight
rates are lower
this year.
Supply/demand
balance will be
an issue in 2015
due to orderbook.
Relationship between rates, costs and supply/demand
Source: Drewry Container Forecaster

12. Conclusions and outlook
Annual volume growth of approx 5-6% in next five years, but this will not be uniform across all regions
ULCV deliveries in 2015/16 will cause deployment issues and in the North-South trades via the cascade
Expected recovery in 2017 is about adapting to change and reducing costs, rather than real possibility of matching supply and demand
The new operating alliances are a positive for the industry, but will bring temporary chaos to scheduling
Freight rates will decline next year and the new low sulphur fuel regulations will be a challenge to all industry stakeholders

13. E mail : dekker@drewry.co.uk