China: strongest seafarer wage raise
China has seen the strongest increase in seafarer wages across the main seafaring countries in international shipping in recent years, according to the latest Manning Annual Review and Forecast report published by global shipping consultancy Drewry.
China is a large and, more importantly, growing supply source of seafarers. It maintains its position as the second-largest supplier of seafarers to international merchant shipping, accounting for around 11 percent of the total sea-based workforce. The supply of officers is growing and although domestic flagged vessels are the biggest employer, officers are increasingly found in international employment on all vessel types. For candidates considering a career at sea in ratings ranks, the employment market within mainland China remains strong. Combined with growth of the Chinese economy, there is a robust demand for skilled labour, which competes directly with the option of work at sea. This has led to higher-than-usual pay increases for ratings where employers have to compete not just with other options at sea but also the on-shore demand.
Two-thirds of European green shipping fuel projects at risk
Two-thirds of European green shipping fuel projects are at risk, a new Transport & Environment (T&E) study shows. T&E’s mapping of green hydrogen projects across Europe shows that nearly 4 percent of European shipping could run on green e-fuels by 2030. But fuel suppliers appear to be reluctant to commit financially to projects without more guarantees that there will be demand for these fuels in the near future. This means the vast majority of projects may never come online in this decade, putting Europe’s climate ambitions and thousands of jobs at risk, warns T&E.
Handy tanker segment
The Handy tanker segment is about to face a supply crunch, as a result of years of underinvestment. In its latest weekly report, shipbroker said that “despite being the oldest deep sea tanker fleet, the Handy sector (32,000 – 42,000 dwt) has been the least invested tanker sector of the past decade. Whilst the Handy market has also been most impacted by the War in Ukraine, both from a sale and purchase and trading perspective, there is still a clear need for modern well approved tonnage, with the sector facing a major supply crunch in the years ahead”.
According to Gibson, “from a demand perspective, one cannot hide the fact that demand has declined, with a reduction in Russian cargoes being the key factor. However, clean Handy demand has been stable since 2022, whilst the fleet continues to age. In the dirty market, demand also looks to be steady, with 2024 ytd tonne miles similar to 2023. Evidently for now the decline in demand appears to have paused”.
Investors’ changing preferences for latest ships
Dramatic changes in shipping investors’ emphasis on newbuilding orders have unfolded in the past few years, causing divergent orderbook profiles. Some further shifts, perhaps equally striking, can be expected over the years ahead.
Collective preferences for new capacity in the world fleet of cargo-carrying merchant ships – comprising bulk carriers, tankers, container ships, gas carriers and other ship types – reflect numerous influences. A common enduring feature is the puzzle characterising many aspects of future events that will determine the merits of any investment.
Momentum returning to the capesize sector: dry bulk market
After a slow start due to a UK Bank Holiday, the market quickly regained momentum. The Pacific was notably active, with all three major miners actively fixing throughout the week. Initially rates struggled to gain traction as brokers reported an oversupply of early vessels. However, towards the latter part of the week, the Pacific benefited from an uptick in coal cargoes from Indonesia and East Coast Australia, and operator activity, driving freight rates higher, as a result the C5 index rose by $1.15 this week, closing at $11.135. Early in the week, activity in the Atlantic was limited, but a tightening of tonnage was noted in the North. Midweek saw positive sentiment bolstered by increased fresh cargoes and strong fronthaul fixtures from East Coast Canada to China, leading to substantial gains in the C9 index, which climbed $3,129 on the week, closing at $48,563.
Again container rates on the rise
Container shipping rates are on the rise once more. In its latest weekly report, shipbroker said that “container shipping rates are soaring, nearing record highs from the pandemic era as the Baltic FBX index is at USD 3,408 / TEU, closing down to the January 2020 levels and 150 percent higher than the last week of 2023. This rates’ surge is due to a limited supply of containers caused by rerouting around the Red Sea and healthy demand in multiple regions. The busy season has started early, pushing rates on major east-west routes to their highest levels since September 2022. This boom is affecting nearly all routes, including those to Latin America, Africa, and within Asia”.
New reality of shipping
After a period of relative stability spanning five decades, the industry finds itself grappling with a new reality. A maturing Chinese giant, the rise of regional trade blocs, and the growing significance of short-sea shipping are all reshaping the global maritime landscape.
Speaking in a DNV’s Market Views videocast, renowned maritime economist Dr Martin Stopford, author of the influential Maritime Economics book, painted a picture of a maritime industry navigating a significant turning point.
Stopford envisioned a future where the focus shifts away from colossal vessels conquering vast distances. Instead, he anticipates a surge in short-sea shipping, offering the adaptability and speed crucial for regional integration and just-in-time delivery.