The document discusses the challenges faced by shipyards, particularly in China and South Korea, which are overstaffed and suffering from a lack of demand, leading to financial losses. It also highlights the negative impact of postponed orders and declining demand for vessels and oil platforms, contributing to an overall imbalance in the shipping industry. Despite these challenges, there is a positive note from Antwerp Port, which reported record cargo volumes in 2016.

1. WHY SHIPYARDS ARE AT A LOSS.

2. JOIN THE CONVERSATION
ON TWITTER
@XENETA_AS

3. ABOUT
XENETA
At Xeneta we believe there is an untapped
potential for everyone in the industry, to
systematically learn from our individual
and collective efforts. We hold true that "if
you cannot measure it, you cannot improve
it". That’s why we think actionable metrics
is the key to continuously evolve for every
business, and ultimately the entire industry.
Rethinking global logistics is the vision of
Xeneta.
With international experience from the
logistics industry, we have first-hand
knowledge of the challenges related to high
volatility and lack of transparency in the
ocean freight market. By combining
logistics background and information
technology expertise, we found the solution
WE ARE
TRANSFORMING
GLOBAL
LOGISTICS

4. ARE YOU PAYING THE
RIGHT CONTAINER
FREIGHT RATES?
DISCOVER SAVINGS
POTENTIAL IN REAL
TIME.
CONTACT US.

5. AS WE REPORTED IN
DECEMBER 2016, THERE IS
BOTH GOOD AND BAD NEWS
ON THE HORIZON IN 2017; IT
WILL BE INTERESTING TO SEE
WHETHER OR NOT THE
CURRENT RISING RATES ARE
THE VORTEX OF A TYPHOON,
OR THE CALM AFTERMATH OF
A TSUNAMI.

6. CERTAINLY "IMBALANCE" IS THE KEY
WORD FOR THIS INDUSTRY AND
TRADE AS A WHOLE. SHIPYARDS ARE
DEFINITELY SUFFERING FROM A LACK
OF BALANCE.

7. OVERSTAFFED SHIPYARDS
WITH LITTLE DEMAND

8. A SERIOUS PART OF THE
SHIPPING WORLD'S
IMBALANCE COMES FROM THE
CHINESE AND S. KOREAN
SHIPYARDS.

9. THESE SHIPYARDS ARE GROSSLY OVERSTAFFED, AND TAKING
ORDERS FOR SHIPS AT PRICES THAT GUARANTEE A LOSS BUT
KEEP PEOPLE WORKING – OR AT LEAST MARGINALLY
EMPLOYED.
OTHER THAN OIL, PARASTATEL INDUSTRIES TYPICALLY DON'T
SUCCEED IN A FREE MARKET ECONOMY, AND WHEN LOOKING
AT THE RECORD OF CHINA'S STEEL, CEMENT, ALUMINUM, AND
SHIPBUILDING INDUSTRIES, THESE DON'T SUCCEED IN CHINA'S
SEMI-REGULATED ECONOMY EITHER.
CONCERN IS MOUNTING ABOUT WHETHER SOUTH KOREAN
SHIPYARDS WILL BE ABLE TO REPAY RECORD AMOUNTS OF
DEBT COMING DUE IN 2017.

10. JOIN US ON JANUARY 17TH, 2017
AS WE ANALYZE CONTAINER
SHIPPING PRICES FOR THE MAIN
GLOBAL ROUTES AS REPORTED IN
THE XENETA PLATFORM.
JOIN
NOW

11. LOW VESSEL PRICES. MORE
SHIPS. EXTRA CAPACITY.
UGLY SPIRAL.

12. ALL THE SHIPYARDS
HAVE INCURRED
MULTIPLE QUARTERS
OF LOSSES IN THE PAST
18-24 MONTHS DUE TO
A DEADLY
COMBINATION OF
POSTPONED ORDERS
AND A PLUNGE IN
DEMAND FOR NEW
VESSELS AND OIL
PLATFORMS.
CHINESE AND
JAPANESE SHIPYARDS
ALSO HAVE BEEN
AFFECTED.

13. COSCO SINGAPORE, WHICH IS OWNED BY A CHINESE
COMPANY AND HAS ITS SHIPYARDS ON THE MAINLAND, SAW
BULK-CARRIER ORDERS CANCELED AS SLOWER COMMODITIES
DEMAND IN CHINA HAS LED TO OVERCAPACITY AND THE
DECLINE IN THE BALTIC DRY INDEX THAT AFFECTED RATES
AND THEREFORE PROFITABILITY.
HI CORP., CO-OWNER OF JAPAN’S SECOND-LARGEST
SHIPBUILDER, LOWERED ITS NET INCOME TARGET FOR THE
YEAR WHILE MITSUI ENGINEERING & SHIPBUILDING CO. ALSO
CUT ITS FORECAST.

14. SIMILAR TO THE 20% CARGO VERSUS
CONTAINER IMBALANCE THAT
CONTINUES TO AFFECT BOX RATES; TOO
LITTLE DEMAND FOR NEWBUILDINGS
FORCES SHIPYARDS TO OFFER VESSELS
AT PRICES THAT ENTICES CARRIERS TO
BUY UNNEEDED VESSELS THAT SERVE
TO DRIVE RATES DOWNWARD. THIS IS
AN UGLY SPIRAL.

15. LEARN HOW XENETA CAN HELP
YOU GET INSIGHT INTO YOUR
GLOBAL OCEAN FREIGHT PRICES.
REQUEST
DEMO NOW

16. THE GOOD NEWS

17. COMES FROM ANTWERP, WHERE THE
PORT AUTHORITIES REPORTED A
RECORD YEAR IN BOX CARGO,
EXCEEDING 10 MILLION TEU'S IN
2016. FINAL RESULTS ARE 10,056,603
TEU'S, A 4.2% INCREASE OVER 2015,
CARRYING 117,979,603 METRIC TONS.

18. UNKNOWN HOWEVER, IS HOW MUCH
OF THIS CARGO COMES AT THE
EXPENSE OF
HAMBURG-LEHAVRE-ROTTERDAM
PORTS DUE TO 2M, OCEAN ALLIANCE,
AND THE ALLIANCE LANE AND
SCHEDULING CHANGES THAT GIVE
ANTWERP A STRONGER POSITION IN
THE ASIA – N. EUROPEAN RANGE
TRADES.

19. WHETHER IN CONTAINERS OR THE
SHIPS HAULING THE CONTAINERS,
BAD THINGS HAPPEN UNLESS
SUPPLY AND DEMAND IS ROUGHLY
BALANCED. 2017 IS LOOKING TO BE
AN INTERESTING YEAR.