ANL’s Schultz sees mixed bag on global trade lanes and cautious optimism for 2016

In the first of a series of interviews, we spoke to Chris Schultz, General Manager, Business Development at ANL Container Line Pty Ltd who shared his insight into the increasingly volatile global container shipping sector

How has 2015 been for ANL given the significant changes in the global economy, the fall in bunker fuel prices and the introduction of the super post panamax ships in the 18,000-20,000 TEU range?

In 2015 we have seen vessel capacities grow by approximately 5% on the East West routes as carriers aim to improve economies of scale. Moreover growth in 2015 did not meet initial expectations and demand dropped by 5% on these trade lanes causing a gap in demand and supply. This led to increased volatility in the market which resulted in heavy losses for carriers on these routes. The fall in bunker prices resulted in fixed cost savings for the lines however these were largely passed back to the customers via lower freight rates including the BAF component.

Do you think slow steaming will stay in place for 2016 on East West trades?

We forecast that bunker prices will remain relatively low during the first half of 2016. Once bunker prices do start to rise then we expect that carriers will review their policy in regard to slow steaming. With modest growth forecasted in 2016 we expect that carriers will continue to look for opportunities to reduce costs whilst maintaining levels of service.

Australia has enjoyed a period of economic growth during the last five years, have you seen a slowdown in trade in 2015 and what are the prospects for 2016?

2015 saw a slowdown in imports from some origins due to the fall in the Australian dollar but the strong Australian economy still underpins good consumer demand for imported goods. The fall in the dollar helped exports with dairy and grains doing particularly well.  The outlook for 2016 looks to be relatively stable with the exchange rate hovering around the US$0.70 mark.

What have been the trade lanes that have shown the most growth for ANL?

On the East West trades ANL achieved small growth on the trade lane ex Indian Sub-Continent to North Europe. The total trade between Far East and Europe was down year-on-year with blank sailings making it difficult to achieve any growth.

On the North South trades 2015 it was a very difficult year with slow market growth with the exception of the southbound South East Asia market (2.9% growth over 2014) and the northbound trade lanes from Australia to Indian Subcontinent (21% growth) and Middle East Gulf (7% growth).

Despite this, ANL has performed relatively well, with most southbound trades showing increased liftings over the previous year and positive growth in the northbound trade lanes of North and East Asia, ISC/MEG and the important New Zealand market. Significant growth was experienced on our PAX (Singapore/Darwin/Dili) service as well our new dedicated three vessel Trans-Tasman service which we launched in February 2015.

SOLAS VGM will be mandated by the IMO in July 2016, whereby all shippers are responsible for submitting the weight of each container to Port State Control before loading on the vessel. Is ANL involved in discussions with customers and 3PLs to find a solution?

ANL has been involved with Australian Maritime Safety Authority, who have organised information sessions on this issue and who will be conducting more workshops in January. ANL plans to begin communicating with clients when more substantial information comes out this month.

Do you see further consolidation in the container shipping sector in 2016?

Short answer… yes it is an ongoing process. Our parent company CMA CGM made an offer for NOL.