Issue link: https://maltatoday.uberflip.com/i/664438
maltatoday, SUNDAY, 10 APRIL 2016 VI Shipping EVERY day, we go to great lengths to connect people and businesses all over the planet. Delivering millions of parcels, documents and freight consign- ments with care and attention - because we understand how important each and every parcel is to you and to your customer. Whatever you need to send. Wherever you need to send it. We take it personally. From the moment your regular driver collects your parcel, until your customer's local TNT contact delivers it, we keep you and your customer connected. We can do this thanks to our integrated door-to-door network. You can even watch it happen using our online tracking services. And if your industry has specific ship- ping requirements, we've got them covered too. You can trust us to get the job done, so you're free to focus on expanding your business. When a new customer asks for an urgent delivery - say yes with confidence. Even if the deadline is tomorrow and even if you've never shipped there before! We're very proud of our network and technology, but at the end of the day we know that it's our people together with your people who make it happen. Your customer care contact at TNT knows you, and knows your business. And she's connected to 58,000 other TNT people whose mission is to grow your busi- ness by getting your documents, parcels and freight where they need to go. Overcoming hurdles like borders, distance, cultures, language, and currencies. Connecting people and their businesses all over the world, helping them and growing their businesses, that is what we do. At TNT, we understand that the quality of the relationship with your customers is as important as the delivery of the shipment as promised. We all have custom- ers but we at TNT interact with people that work for customers. It's people that appreciate special attention and true care and respect. That creates a quality relationship and loyalty, which is gratifying for all and good for business. And that's why we are the way we are. That's why we make sure our service is truly personal. That's why we go the extra mile. And that's why we call ourselves The People Network. TNT Malta has a daily connec- tion with their own aircraft to the main TNT European hub in Liege for your urgent Express docu- ments or parcels with delivery next day into Europe. TNT Malta also offers a daily connection for your less urgent Economy shipments which connect with the extensive road network across Europe thereby providing a wide range of delivery services to meet your customer commitments and expand your reach. C&C Express Ltd, part of the Cassar & Cooper Group est. 1946, is TNT's associate in Malta. For further information please contact our sales team on: 2558 4600 or by email: sales@tnt.com. mt; web: www.tnt.com. We look forward to assisting you with the right solution for your business requirements. TNT - The people network Optimistic outlook for container market THE latest Container Shipping Forecaster from MSI suggests a more positive market outlook for the container shipping sector in 2016 than the analysis of most of its peers. Though its supply-side predictions are broadly aligned with those of Drewry and Alphaliner, MSI makes a more optimistic forecast on the demand side – indeed its trade growth estimates for 2016 are more than double those of the others. Much of this positivity rests on an inter- pretation of the dynamics of trade volumes on the Asia-Europe route, with MSI ascrib- ing much of the weakness in 2015 to short- term currency and inventory effects and 2016 seeing a reversion to fundamentals- driven growth. The market gyrations around Lunar New Year mean that the sector will have to wait another month before it becomes clearer which of the analysts' competing views bet- ter fits the live trade data. In the meantime, no one should mistake the container freight or charter markets as happy places, says MSI Senior Analyst James Frew. "The inevitable seasonal weakness in Q1 has meant that earnings remain on the floor in both the freight and charter markets. Freight rates across the board are ex- tremely subdued, with the Asia-Europe spot freight markets falling throughout February to reach new record lows in March. We anticipate that strong scrapping volumes will increase further in the remainder of the year, but this will be more than offset by an uptick in delivery volumes as cash-strapped yards are unable to push out final delivery much further." While spot freight rates on the main routes remain at lossmaking levels, with non-mainlane trades looking equally weak, in the near term MSI expects that on these trades liner companies will mount increas- ingly determined efforts to boost freight rates, particularly in the light of the upcom- ing contract negotiations. Helped by improved fundamentals, with stronger trade growth driving increased vessel utilization, liner companies will be less reliant on general rates increases to artificially boost freight rates and the stronger lines will look to consolidate their positions through increased market share. This will in turn present some downwards pressure on box earnings, but not before it has boosted vessel demand and injected some upwards momentum into the charter market. The charter market at present remains in the doldrums and for many market partici- pants it is unclear where the uplift will come from in the short term. Nonetheless, MSI is relatively positive regarding the outlook for 2016, with trade growth and scrapping be- ing the key drivers of this optimistic tone. BDI hits 500, but bulker overcapacity remains ON Wednesday, the Baltic Dry Index broke the 500 mark once more, the highest level achieved yet this year. Rates are not yet back into the range of profitability, nor are they more than a small fraction of the levels seen in 2008, when the BDI approached 12,000 points, but Wednesday's index value still represents a 70 percent increase over the record low of 290 points in February. Dry bulk suffers under the dual burdens of weak demand – declin- ing Chinese and Indian industrial commodity imports – and significant overcapacity. Global bulker tonnage has been relatively resistant to change by scrapping, as scrap prices have been down, giving owners less incentive to sell old tonnage to ship- breakers (scrap steel hit a low in the range of $250 per LDT in February – less than half of the value in the first quarter of 2014). Prices have been rising in recent weeks, though, reaching the range of $300 per LDT in early April, and the latest demoli- tion report from Seasure shows that the rate of shipbreaking has outpaced 2015 for the first quarter of the year, for all but the smallest bulkers. Nearly 100 panamaxes and capesizes have been demolished since January, the firm says. However, Allied Shipbroking said that the recent improvements in scrap may prove to be fleeting. "There are . . . a lot of concerns over the recent rally, with many finding the rise to be still mainly based on the positive sentiment that was left over by the latest [Indian] import levy announced on Chinese steel products, as well as a belief that the Chinese government would do its part to revive its demand for commodities such as steel through . . . restructuring. There is a feel, however, that this market exuber- ance might have been too hasty and might eventually prove to be unfounded," the agency said. Industry observers warn that sus- tained scrapping activity is required to return balance to the market. "The only solution is for shipowners to remove older capesize ves- sels from the fleet until the market recovers, otherwise the industry faces many more years of losses," said Rahul Sharan, lead analyst for dry bulk shipping at Drewry, in a release in late January. "Any market correction resulting from inevita- ble insolvencies will not alone be sufficient to correct supply/demand imbalances." Drewry called for the recycling of 20 million dwt worth of capesizes. On the orderbook side, tonnage awaiting delivery remains exces- sive, Drewry says, representing about 15 percent of the present fleet – but it is not growing, at least for standard vessel classes. In a report Wednesday, Vessels- Value.com suggested that only two contracts for capesize or smaller bulk carriers were signed in the first quarter, down from 78 in the same period last year. Even these two small additions to the books appear to have been negated by the many orders recently delayed or terminated, such as the five handymax contracts eliminated by Pioneer Marine in March and the Kamsarmax newbuild canceled by Scorpio on Monday. In Febru- ary, Allied reported that fully half of the 200 bulker orders scheduled for the prior month were delayed or canceled, and predicted that a substantial fraction of the delayed contracts would never see comple- tion – suggesting that the orderbook volume may be much smaller in reality than on paper. But private shipowners' restraint in ordering and in taking delivery may not be enough to avoid a future of oversupply, given massive state- owned purchases. Last month, COSCO Group, China Merchants and ICBC Financial jointly ordered 30 Valemax bulkers– equivalent to 60 capesizes, totaling 12 million dwt – for purposes of carrying iron ore from Vale's mines in Brazil to the Chinese market. Once deliv- ered, the new Valemaxes alone will add back 60 percent of the dry bulk capacity Drewry has called on shipowners to remove.