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WHY SHIPYARDS ARE AT A LOSS.
JOIN THE CONVERSATION
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@XENETA_AS
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
ARE YOU PAYING THE
RIGHT CONTAINER
FREIGHT RATES?
DISCOVER SAVINGS
POTENTIAL IN REAL
TIME.
CONTACT US.
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.
CERTAINLY "IMBALANCE" IS THE KEY
WORD FOR THIS INDUSTRY AND
TRADE AS A WHOLE. SHIPYARDS ARE
DEFINITELY SUFFERING FROM A LACK
OF BALANCE.
OVERSTAFFED SHIPYARDS
WITH LITTLE DEMAND
A SERIOUS PART OF THE
SHIPPING WORLD'S
IMBALANCE COMES FROM THE
CHINESE AND S. KOREAN
SHIPYARDS.
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.
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
LOW VESSEL PRICES. MORE
SHIPS. EXTRA CAPACITY.
UGLY SPIRAL.
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.
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.
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.
LEARN HOW XENETA CAN HELP
YOU GET INSIGHT INTO YOUR
GLOBAL OCEAN FREIGHT PRICES.
REQUEST
DEMO NOW
THE GOOD NEWS
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.
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.
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.

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Why Shipyards Are At A Loss

  • 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.
  • 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
  • 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.