This eagerly anticipated talk, which is part of a three-day conference programme at Intermodal Asia 2024, provided attendees with an overview into how shipping lines, leasers, and BCOs are responding to current geopolitical tensions; what that means; and what the future of this “new normal” could mean for the container industry.
Tim Power, Managing Director and Head of Maritime Advisors at Drewry, highlighted that while leasing companies are experiencing a decline in market share, shipping lines are experiencing increased profitability. Many are choosing to tackle Red Sea disruption by increasing capacity instead of speed as the cost implications are an additional 2%, compared to 22%, when considering additional fuel requirements.
“What many leasing companies want to know, is whether the profitability of the lines will continue to increase, and how much of the container market will they hold. It is expected that lines will continue to increase their share towards the end of 2024, which is currently estimated to be at 60%,” said Power.
“This disruption could last a long time. When it does come to an end, there will be an adjustment period, but lines will not go back into the red sea until they are sure it is safe,” added Power.
Power was joined by Kelly Chen, Head of Strategic Supply at FreightOS, who added that following the initial disruption and delays caused by route diversion in December 2023, some volumes across India and Dubai are being pushed to air, a “new normal” where transit times are predictable, and containers are flowing, but “capacity is stretched thin to do so”.
“When Red Sea traffic resumes, expect a readjustment period, followed by a return to overcapacity,” said Chen.
Attendees to Intermodal Asia 2024 will be able to join further discussions throughout the event, which was opened by Mr. Huang Tianhua, President of China Container Industry Association (CCIA) and Vice President of CIMC Group, who welcomed visitors with a rallying call for “cross-border cooperation in sustainability and digitalisation in the container industry”, in order to bring “greater space for development across the container market”.
More than 90 industry suppliers from around the world are exhibiting their services at Intermodal Asia 2024, including key players such as CCIA, CIMC, COSCO, CCS, COA, Touax, Tex, Thermo King, UES Investment, Triton and xChange.
“Since its inception Intermodal Asia has grown in stature, purpose and is now the premier industry event that connects the Intermodal Logistics and Shipping communities across Asia and beyond. From container manufacture and refit to cold chain solutions and the technology that powers our ever-advancing sector Intermodal Asia has it all,” said Rob Fisher, Event Director of Intermodal Asia.
Intermodal Asia is organised as a joint venture between Informa Markets and China Container Industry Association (CCIA), with the support of CIMC. This year’s event will conclude on Friday 24 May 2024 in Shanghai, as early reports indicate thousands of intermodal leaders and industry professionals are in attendance.
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