The Ministry of Trade, Industry and Energy (MOTIE) announced on July 6 that South Korea’s shipbuilding industry achieved 1^st place in terms of shipbuilding orders for the first half of 2022, winning 45.5 percent (9.79 million CGT) out of a total of 21.53 million CGT, the entire volume of shipbuilding orders worldwide for that period.

In so doing, Korea has reclaimed top spot for H1 after previously claiminig it in 2018. When excluding delayed demand effect of 2021, H1 2022 results are the country’s best first half performance since 2011 (10.36 million CGT).

Korea won 62 percent of total global orders in the first half for high value-added ships, which amounts to 6.92 million CGT out of 11.14 million CGT worldwide.

Moreover, as LNG demand is rising amid Qatar’s LNG carrier bids and Russia-Ukraine war, large-scale LNG carrier bid openings have noticeably increased. During H1 2022, Korea won 63 large-scale LNG carrier bids, equivalent to 71 percent (5.44 million CGT, $13.9 billion) of the total global bids.

Surging freight cost kept fueling demand for large container ships, and Korea won 26 ships, equivalent to 43 percent (1.48 million CGT, $13.9 billion) of world total.

Korea continued strong with respect to eco-friendly ships as well, winning 58 percent (7.98 million CGT out of world total 13.72 million CGT).

By fuel type, LNG-fueled vessels were most numerous in number (115 ships), followed by methanol-fueled vessels (4 ships), then LPG-fueled vessels (1 ship).

Backlog of orders reach 35.08 million CGT as of June 2022, which is 28 percent higher than the total of previous year’s first half, and three major domestic shipbuilders (Hyundai Heavy, Samsung Heavy and Daewoo Shipbuilding) already are almost filled to the brim with their order targets for 2025-2026.

In terms of order backlog, Korea’s shipbuilders dominated the global ranking from 1^st to 4^th (In order, Samsung Heavy, Hyundai Heavy and Daewoo Shipbuilding, Hyundai Samho Heavy).

As demand for eco-friendly vessels is forecast to rise further in step with the International Maritime Organization (IMO) imposing environment protection regulations, as well as Qatar’s LNG carrier bid openings slated for second half of 2022, the stream of orders is expected to continue worldwide.

The Ministry will continue to support Korea’s shipbuilding industry build competitiveness in future products, such as autonomous ships, eco-friendly ships and Smart K-yard, so that Korean shipyards can adapt to paradigm shifts like “green” and “smart.”

Source: https://english.motie.go.kr/en/pc/pressreleases/bbs/bbsView.do?bbs_cd_n=2&bbs_seq_n=1012

It’s been another bumper month for long-term contracted ocean freight rates, as the cost of securing container shipments climbed by 10.1% in June. Following on the heels of a record 30.1% hike in May, this now means rates stand 169.8% higher than this time last year, with just two months of declines in the last 18 months. Despite a degree of macro-economic uncertainty clouding the horizon, all major trades saw prices moving up, with some corridors showing significant gains.

Oslo-based Xeneta has released the figures, drawn from its Xeneta Shipping Index (XSI®) Public Indices for the contract market, which crowd-sources and aggregates real-time data from the world’s leading shippers to deliver market insights. Those insights, notes Xeneta CEO Patrik Berglund, continue to confound commentators.

A question of sustainability
“Rates developments that would have been front page news a few years ago are in danger of becoming the norm in a market environment that is historically hot,” he states. “After last month’s colossal rise, we see another hike of 10%, pushing cargo owners to the limits, while the carriers fill their pockets. Again, we have to question, is this sustainable? And the signs are gathering that, well, it might not be.”

Berglund points to falling spot rates – that may increasingly tempt shippers away from traditional contracts – in addition to looming industrial action in ports (in Europe and, potentially, the US) that could further damage schedule reliability only just recovering from recent congestion and COVID-induced disruption. In addition, there’s the fact that the US has signed into law the Ocean Shipping Reform Act, designed to stop shipping companies from profiteering, and the looming shadow of widespread inflation that may impact upon consumer demand and slow economic activity.

Frayed relationships
“The carriers have had it all ‘their own way’ for the last 18 months or so,” Berglund comments, “but will they now be studying this wide array of factors with some concern? Not while rates continue to rise, but the relationship between their community, shippers and, to some extent, other key society stakeholders has been damaged by disruption, poor quality services (in terms of reliability) and runaway rates increases.

“We’ve already seen some cargo owners looking to distance themselves from traditional carriers and, for example, charter their own vessels, and you have to ask what will happen next? Will shippers continue to pay sky-high contracted rates in an atmosphere of declining demand, inflation, geopolitical uncertainty, disruption and the ongoing threat of COVID restrictions? Something, one feels, has to give.”

Xeneta CEO Patrik Berglund ​

The only way is up
For the time being, however, the rates arrows continue to point skywards across the board. According to June’s XSI®, which maps developments across all significant trade corridors, import and export benchmarks showed universal growth.

European imports index continued their recent climb, rising 13.7% to stand 163.4% higher than the equivalent period last year. The regional export index jumped by 6.2% and is now 148.2% up year-on-year. Similar signs were seen for Far East imports and exports, with the former rising 5% (up 62.5% against June 21) and the latter jumping 11.6%. The export benchmark is now a mighty 200.6% up year-on-year. This performance was mirrored by the US import figure, which climbed 8.6% over the month to stand 203.2% against last June. Growth on exports was more modest, with a 0.3% rise taking the index 41.7% up year-on-year.

“As we enter another period of turmoil, shippers will transform themselves into risk-averse buyers. Top of mind for them will be which trades they will procure on the spot market and which on the contract market, and their duration. They will aim to strike the best possible balance between both markets depending on their own business needs,” surmizes Berglund.

Stay tuned
He concludes: “The carriers are acutely aware of how their strategies have paid dividends, and won’t want to relinquish this position of power in contract negotiations. But at the same time, they, like the shippers, cannot control the macro-factors that dictate the wider economy. The complexity of the situation makes it difficult to forecast how this will develop, but, one thing’s for certain, develop it will. Stay tuned to the latest market intelligence to give you the understanding your business needs.”

Xeneta’s XSI® is compiled from the latest crowd-sourced ocean freight rate data aggregated worldwide. Companies participating in the benchmarking and market analytics platform include names such as ABB, Electrolux, Continental, Unilever, Nestle, L’Oréal, Thyssenkrupp, Volvo Group and John Deere, amongst others.
Source: Xeneta

The UN Conference on Trade and Development (UNCTAD) says the war in the Ukraine is stifling trade and logistics of the country and the Black Sea region, increasing global vessel demand and the cost of shipping around the world.

In a report entitled “Maritime trade disrupted: The war in Ukraine and its effects on maritime trade logistics” published on 28 June, UNCTAD says Ukraine’s trading partners now have to turn to other countries for the commodities they import.

It attributes the shipping and transport hurdles in the Black Sea region to disruptions in regional logistics, the halting of port operations in Ukraine, the destruction of important infrastructure, trade restrictions, increased insurance costs and higher fuel prices.

Shipping distances have increased, along with transit times and costs.

“Grains are of particular concern given the leading role of the Russian Federation and Ukraine in agrifood markets, and its nexus to food security and poverty reduction,” the report says.

Soaring shipping costs raise food prices

Fewer grain shipments over longer distances are leading to higher food prices.

Grain prices and shipping costs have been on the rise since 2020, but the war in Ukraine has exacerbated this trend and reversed a temporary decline in shipping prices.

The report says between February and May 2022, the price paid for the transport of dry bulk goods such as grains increased by nearly 60%.

The accompanying increase of grain prices and freight rates would lead to a 3.7% increase in consumer food prices globally.

The Russian Federation is a giant in the global market for fuel and fertilizer, which are key inputs for farmers worldwide.

Disruptions in their supply may lead to lower grain yields and higher prices, with serious consequences for global food security, particularly in vulnerable and food-import-dependent economies.

Higher energy prices exacerbate challenges for shippers

The Russian Federation is also a leading oil and gas exporter.

“Confronted with trade restrictions and logistical challenges, the cost of oil and gas has increased as alternative sources of supply, often at more distant locations, are called upon,” the report says.

Daily rates for smaller-size tankers, which are key for regional oil trading in the Black Sea, Baltic Sea and Mediterranean Sea regions, have dramatically increased.

The higher energy costs have also led to higher marine bunker prices, raising shipping costs for all maritime transport sectors.

According to the report, by the end of May 2022, the global average price for very low sulphur fuel oil had increased by 64% since the start of the year.

Taken altogether, these increased costs imply higher prices for consumers and threaten to widen the poverty gap.

Policy actions needed to keep global trade flowing

UNCTAD calls for urgent action to open Ukraine’s ports to international shipping so the country’s grain can reach overseas markets, at lower shipping costs.

The organization says continued collaboration is needed among vessel flag states, port states and other actors in the shipping industry to maintain all necessary services, including bunkering supplies, health services for sailors and certification of regulatory compliance.

This will help to keep to a minimum the negative impacts on costs, insurance premiums and operations.

UNCTAD also says alternative ways of transport must be pursued and that easing transit and the movement of transport workers – even temporarily – can reduce the pressure on cross-border trade and transit.

Also, UNCTAD calls for more investment in transport services and trade and transit facilitation.

And more international support for developing countries, especially the most vulnerable economies, as the war in Ukraine adds to the challenges posed by the COVID-19 pandemic and the climate crisis.

(Dreamstime photo of Odessa grain dryer facilities blocked from export shipping)

Source: https://maritimemag.com/en/unctad-report-stresses-impact-of-ukraine-war-on-global-maritime-trade/

Chief Executive Bob Chapek introduced Walt Disney Co’s first new cruise ship in a decade on Wednesday, the culmination of the first project the former theme parks executive championed to the company’s board of directors.

The launch of the 4,000-passenger Disney Wish is a bright spot for Chapek, who became Disney’s CEO in February 2020 and secured a three-year contract extension on Tuesday following recent controversies that prompted questions about his tenure.

It took more than six years to bring the 144,000-ton Wish to the market, Chapek told guests at a christening ceremony that featured fireworks and appearances by Mickey and Minnie Mouse, Ant-Man, Chewbacca and other characters from Disney’s vast portfolio.

On the ship, “we combine these amazing characters and stories with incredible technology to create brand new experiences,” Chapek said.

The cruise business is part of Disney’s massive theme parks, experiences and products unit, which has rebounded from pandemic closures. Operating income hit $4.2 billion in the first half of fiscal 2022, reversing a $535 million loss a year earlier.

Disney does not disclose how much cruises contribute to earnings, but Chapek said in November that the business has generated “a double-digit return on investment” given the premium price that Disney charges.

The Wish, the fifth vessel in Disney’s fleet, “kicks off the largest expansion in Disney Cruise Line history,” said Josh D’Amaro, chairman of Disney’s parks division. Two more ships will be delivered by 2025.

The new ship sets sail as the industry works to lure customers back after a 15-month shutdown during the COVID-19 pandemic.

The Cruise Lines International Association estimates it could take until the end of 2023 for passenger volume to surpass the levels of 2019, when 29.7 million people boarded ships around the world.

The U.S. Centers for Disease Control and Prevention still advises that COVID-19 “spreads easily between people in close quarters on board ships” and that even vaccinated passengers may become infected.

D’Amaro said he believed Disney’s cruise line would return to full capacity, noting steady gains in bookings.

“When all is said and done, we’ll have seven of them, and all seven of them will be filled out,” he said in an interview. “I have 100% confidence in that.”

The ship also “complements everything that we do,” D’Amaro added. “For example, people that will come to get aboard this ship … they’re spending three days at Walt Disney World.”

The company will seek to entice vacationers to the Disney Wish with what it touts as its first attraction at sea, the AquaMouse. The theme-park-like ride incorporates animated short films featuring Mickey and other characters as guests float through 760 feet (230 meters) of winding tubes suspended above the upper decks.

Dining experiences place families inside the worlds of Disney’s “Frozen” and Marvel’s Avengers. For adults, Disney created a Star Wars-themed hyperspace lounge that evokes the look of star cruisers in “Solo: A Star Wars Story.”

The ship also boasts an interactive experience that marries the physical and digital worlds. A Disney Cruise Line app turns a user’s phone into a virtual “spyglass” for peering at constellations in the night sky (which appear as Disney and Pixar characters) and embarking on adventures.

The interactive game marks a step toward Chapek’s goal of establishing a presence in the metaverse. The executive has advocated virtual experiences as a way to keep consumers connected to Disney characters and stories in between movie releases and park visits.

The Disney Wish will set out on its first voyage on July 14 from Port Canaveral in Florida.

Disney has been embroiled in controversy in the state after the company opposed legislation to limit LGBTQ discussion in schools. That prompted state lawmakers to pass a measure that removes the company’s self-governing status for Walt Disney World in Orlando, though it has not yet taken effect.

Employees at Disney had urged the company to speak out against the LGBTQ legislation, which opponents dubbed a “Don’t Say Gay” bill.

Source: https://www.marinelink.com/news/disney-unveils-first-new-cruise-ship-a-497747