In November it could be possible what the next year looks like. How would be the next year looks like?
U.S.A. – in the slow recovery supported by the personal consumption of 70% of GDP..
It could be proved that U.S.A still has full of energy to see that new GM will be listed in the New York Stock Market again one year after their bankruptcy. President Obama will tackle to activate the economy with his full strength in order to be reelected the President 2 years later.
Europe – their power of unity should not be underrated.
They could manage to get over any crises in a body while there are several sparks such as Ireland, Portugal and so on. The situation would not be worse than reported.
China – with the growth of 9.6% in changing year of 2011.
Abolition of preferencial tax for foreign capital. Evasion of pressure of revaluation of Yuan. Approval of raise in wage in order to resolve economic differential between the coastal cities and inland. Coordination of international friction caused by sense of major power The conflict between political reform and democratization.
South Korea – Strong leadership by President Lee Myung Bak.
Conclusion of FTA with EU & USA would give Korean products more competitive. G20 hosted by Korea has been appealing the power of Korean economy, politics and diplomacy to the world.
South East Asia – steady economic growth will ensure their era to come.
To follow China by introducing foreign capital to get their economy grow. Hegemonism of China and the policy of buy Chinese would make the role of the world factory shift to Thailand, Vietnam
Japan – nation who has less presence.
No breaking through a sense of despair due to the unchanged politics for politician applied over one year after Liberal Democratic Party was transferred to the Democratic Party of Japan. Lost confidence by a small‐time diplomacy behind the world. Politics and society would be like in the Galapagos Islands while being lost No.2 ranking to China in GDP.
Next year would be slowing down in the world economy than 2010. The world would continuously rely on USA. China would show their presence in economy. Chinese politics would influence much economic stability and reliability of the world. Meanwhile, presence of South East Asia would increase. The next year, 2011 would be the year of preparation for 2012. In this meaning there would be not much big change seen.
On the one hand profit in 2010 would improve in the liner companies and secured the black figure in this term. On the other hand the freight rates from China to Europe and N. America have already decreased. The key is how to stop further decrease in the freight rate in coming winter season of less demand starting from December. Unnecessary competition of the freight rate should be avoided by proper reduction of operation ships, reviewing service network after cudgeling all shipping lines’ brains again. World economy would depend on container transportation. Shipping lines should aim at the shipping line who could secure certain profit under any circumstances.
Japanese lines such as NYK, MOL, K LINE have made a profit of the first half of 2010 like \80 billion for NYK & MOL respectively and \40 billion for K Line as an ordinary profit. They look like not being involved too much in their liner business except K Line. We sincerely hope shrinking the liner business should be avoided as long as they are aiming at Logistics companies in the world. We wish them to survive in the severe competition by making the most of Japanese style of delicacy in service. There are many Japan’s overseas enterprises who expect J3 to offer them.
It is Evergreen Marine Corp. that we would like to pay attention as the noteworthy foreign shipping line. Evergreen is quite interesting company. They had been trying to operate around the world services of both ways. They are the revolutionist of shipping lines who have started to utilize ship space as storage place and at the same time to move idling containers to the demand places quickly. It is regrettable that they had to stop such an unique idea. They are fully qualified to be the leader with originality, foresight. Evergreen has started to move again by having ordered in Jul’10 Samsung Heavy Industries 10 x 8,000 teu containership with the delivery in 2011 and in Nov’10 10 x 8,000 teu more to Samsung with the delivery by 2013. They must have fixed their eyes on the shipping market in coming years with their cool insight. Other Taiwanese shipping lines such as Yangming, Wan Hai Lines, T.S. Line are not exceptional who are all in good global business sense to have made them grown bigger. Thus, they are all worthy of our attention in deepening uncertain era
Chinese Container makers seem to take a simple way like raising the container price if the container lines are full of order. On the contrary not full of order would reduce the price little by little until the lines are filled with order. They could not expand their production capacity under the present situation. The reason is that laborers don’t like 3 D (Dirty, Dangerous and Demeaning) and the labor contact law coming into effect in 2008 by Chinese government forces them to decide the contract with laborer to be terminated one year after or to be hired till retirement in case setting up the labor terms. In addition the local Chinese government limits the steel industry electric power to attain the target of saving electricity in 2010. This restriction on power consumption would be lifted by the end of 2010. The container price seems to be in uptrend of $2,600 per d2 because the lines seem to have been full of order till Chinese New Year, Feb. 3, 2011. Thus, it would be interesting to see how the container price would go. If shipping lines and leasing companies continue to order the price would be in uptrend.
Utilization of each leasing company would stay high like 95~98% even now.
Most leasing companies would not be in the situation to reduce utilization drastically which would cause large idling containers. Whole operating containers in the world would be 27,000~28,000 teu of which near 50% would be operated by leasing companies.Shipping Lines and leasing companies have kept using container of past its sell‐by year for 2 years after Lehman shock. The limit date would come without exception. The selling price of 2nd hand containers would stay in high side at present. The selling prices in China would be $1,800~$1,900 per 20f, $2,800~$2,900 per 40f, $3,100~$3,200 per 40f Hi cube. Local dealers of demand places seem to keep the price-maintenance agreement to avoid lowering the selling prices. Leasing companies would try to sell in the places where they can sell in high price and make profit. Shipping lines could not do business without containers. Therefore, they seem to keep them longer without guarantee of containers available in demand places. If shipping lines would change their policy of stopping to solicit cargo without containers shipping lines could save lots of cost such as storage, repair charge, handling charge, transportation and so on if they sell container of past its sell-by year without hesitation? This would put the brakes on falling the freight rate eventually.
Delivery of new container ships this year would be 1.42 million teu. This is the 2nd largest in the past after 1.57 million teu of 2008. However, 65 containerships with 435,000 teu capacity planned delivering in 2010 would be postponed and delayed next year. As a result, containership of 1.4 million teu would be put in service in 2011. Full of cargo would be available in 2011 as expected? If there is not enough cargo to make these new containerships in full operation the idling containers could not go anywhere. Therefore it would be recommendable for shipping lines to dispose container of past its sell-by year when they could be sold in high price in 2nd hand market. Doing the unnecessary the purchase price would come to the average purchase price of 10 years. if you keep buying certain volume of containers every year at the high price or low price. Thus, you could neglect the purchase price of every year. The most important thing to shipping lines and leasing companies is to keep containers in their system younger which makes shipping line and leasing companies appealing strong to shippers and shipping lines respectively because of young and good quality of containers. Meantime, leasing companies have to buy containers speculatively. Therefore, they tend to buy as many containers as possible when container price is cheap. However, it would be subject to their buying power at that time. It is also very important for leasing companies to decide not buying in inactive market even if container price is attractive to them.