SINGAPORE : In a discussion on where shipping markets were headed in 2023 the container sector is still waiting to settle on a new normal, while volatile bulker and tanker markets make investments in newbuildings uncertain.
In a high-level panel session moderated by Andreas Sohmen-Pao, Chairman of BW Group, at the Singapore Maritime Foundation (SMF) New Year Conversations 2023 event on Friday, shipowners grappled with the complex issues of where shipping would be headed in the coming year and beyond.
The container sector has experienced an extraordinary couple of years making “gajillions of dollars” but is now facing a return to normality.
Lars Kastrup, CEO of Pacific International Lines (PIL) commented, “We’ve come out of a couple of years in container shipping which had been unreal in way with a lot of challenges and earnings we’ve never seen before.”
He noted that everyone knew the market would come back down again at some point and find a new norm. “Well, it came down, but we haven’t found the new norm yet.” For container lines the issues the forefront would be what will the new norm look like, what would be new operational efficiency models, how to navigate through the coming period, and meeting sustainability targets.
Alex Hartnoll, Head of Business Transformation for X-Press Feeders, said that the coming year would obviously be a tough one for the container sector but there was also a lot of optimism. He said it would be “very exciting” to see where the whole industry goes on sustainability. “With disruption comes great opposite opportunity, and that seems to be picking up.”
Looking at commodity driven shipping in the wet and dry bulk sectors Frederik Guttormsen, Managing Director of Shipping for IMC Industrial Group, commented: “I think the fundamentals for shipping, at least in the segments that we are in, still look good.”
Despite the uncertainties of geo-political tensions, war in Ukraine, rising inflation and the energy transition he said: “I do think fundamentally for shipping, things are looking fairly good for 2023 and also into 2024.”
Looking at investments in newbuildings Sohmen-Pao noted while there had been orders for containerships, for bulk in particular tankers, which are now very profitable, the money is not being seen going into orders yet. He asked why people were confident to invest in containerships but not in tankers and dry bulk.
Kastrup commented that perhaps container shipping was a bit more predictable and companies had to continuously develop each year to upgrade and upsize vessels.
Guttormsen from IMC said that he saw container shipping as more similar to aviation when it comes to future investment. However, coming dry bulk and tankers he said, “honestly the numbers just don’t make sense”.