Market Intelligence Initiative Global Air Cargo...2. Monitoring Global Ocean Markets: Rates & Market Forces 3. Tendering Ocean Freight 2020/2021: Freight Procurement Excellence 4

Market IntelligenceInitiative Global Ocean

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Market IntelligenceInitiative Global Ocean


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Asia Update Conference

August 4, 2020

Market Intelligence Initiative Global Ocean

Community Online Conference

Agenda

1. Welcome & Targets of the Day

2. Monitoring Global Ocean Markets: Rates & Market Forces

3. Tendering Ocean Freight 2020/2021:

Freight Procurement Excellence

4. The Market Intelligence Initiatives:

Key Approach & Shippers Benefits

5. Summary and next Steps

Welcome, Personal Introductions & Targets of the Day1.

Clemens SchapelerProject ManagerTim Consult

Fredrik HändelPrincipalTim Consult

Jonas PredikantAnalystTim Consult

Maria KupferAnalystTim Consult

Vivien CheongRegional Sales ManagerTransporeon Asia

Stefan DienerConsultantTim Consult

We are connected


Using the technology


Our modular solution covers the entire transport logistics process: end to end and back again

The more you use Transporeon, the more efficient your processes become"

Monitoring Global Ocean Markets: Rates & Market Forces 2.


Global Active Cases and TrendsSituation across the globe is widely different

Source: https://gisanddata.maps.arcgis.com / Johns Hopkins Universits


Pandemic & RecessionAre we still dealing with a pandemic or by now with a recession?

COVID-19 Pandemic

• Key challenge: Supply chain instability

• Mostly indirect impact

• Impact decreasing with increasing experience

EconomicRecession

• Key challenge: Loss of demand & revenue

• Structural & political drivers beyond COVID 19

• Minor or major mid term impact?

?

Global Fleet DevelopmentRecord idle fleet decreasing active capacity


* Projections (based on current data operated fleet; demolition is considered) | Sources: Alphaliner; CTS ContainerTradeStatistics | yellow: order book

Supply 2015 – 2020: Mio. TEU Fleet Active

0

5

10

15

20

25

2015 2016 2017 2018 2019 Jan 20 June 20

Wo

rld

cel

lula

r fl

eet

cap

aci

ty [T

EU] M

illio

n

Order book

Idle Fleet

Active Fleet

-9%

Regional Capacity Supply

Transpacific

Source: Alphaliner, 2020

Asia - Europe


-

20.000

40.000

60.000

80.000

100.000

120.000

140.000

160.000

180.000

200.000

Weekly

Cap

acit

y [

TE

U]

2M OCEAN Alliance

THE Alliance Other/ Non-Alliance

-

20.000

40.000

60.000

80.000

100.000

120.000

140.000

160.000

180.000

Weekly

Cap

acit

y [

TE

U]

2M OCEAN Alliance

THE Alliance Other/ Non-Alliance

0

500.000

1.000.000

1.500.000

2.000.000

Jan Feb Mar Apr May

TEU

Far East to North America

2019 2020

0

1.000.000

2.000.000

3.000.000

4.000.000

5.000.000

Jan Feb Mar Apr May

TEU

Inner Far East

2019 2020

0

100.000

200.000

300.000

400.000

Jan Feb Mar Apr May

TEU

Far East to South & Central America

2019 2020


Demand Development Far East TradesShipped TEU on Far East Trades Jan-May 2020 vs. Jan-May 2019

India

Source: : CTS ContainerTradeStatistics

0

100.000

200.000

300.000

400.000

500.000

600.000

700.000

Jan Feb Mar Apr May

TEU

Far East to Indian Sub Cont & Middle East

2019 2020

0%

20%

40%

60%

80%

100%

Jan Feb Mar Apr May Jun

Schedule

R

eliabilit

y

[%

]

2019

2020


Asian Schedule ReliabilityRegional Differences can be seen in Schedule Reliability

0%

20%

40%

60%

80%

100%


Schedule

R

eliabilit

y

[%

]

2019

2020 Asia - Europe

Source: CargoSmart, 2020

Intra Asia

0%

20%

40%

60%

80%

100%


Schedule

R

eliabilit

y

[%

]

2019

2020Transpacific

0%

20%

40%

60%

80%

100%


Schedule

R

eliabilit

y

[%

]

2019

2020Asia - Oceania

0

500

1000

1500

2000

2500

3000

3500

Ind

ex

CCFI SCFI


CCFI & SCFI Development since 2019Weekly Development of China Containerized Freight Index & Shanghai Containerized Freight Index

0

100

200

300

400

500

600

700

800

900

Ind

ex

CCFI SCFI

Southeast Asia

0

100

200

300

400

500

600

700

800

900

Ind

ex

CCFI SCFI

Japan

0

200

400

600

800

1000

1200

1400

Ind

ex

CCFI SCFI

Australia/New Zealand

US West Coast

Source: SCFI, CCFI

Hyundai MM ▪South Korean government: $382 million

Evergreen

▪Taiwan government: $270mYang Ming

▪Taiwan government: $270m

Government Aid to Carriers


PIL▪finalizing a $450m deal with Singapore

government’s investment company

CMA CGM ▪State-guaranteed loan: $1.15 bn

Carrier’s situation supported by loans and guarantees

EBIT MarginsPositive impact of lower bunker prices and significant capacity reduction

0%

1%

2%

3%

4%

5%

6%

7%

Q1 2019 Q2 2019 Q1 2020 Q2 2020*

0%

1%

2%

3%

4%

5%

6%

7%

Q1 2019 Q2 2019 Q1 2020 Q2 2020*0%

2%

4%

6%

8%

10%

12%

14%

Q1 2019 Q2 2019 Q1 2020 Q2 2020*


* - estimate based on company preliminary assignments

0

100

200

300

400

500

600

700

US

D/ M

T

Rotterdam -IFO380 Rotterdam - (V)LSFO


Fuel Price Development IFO380 & (V)LSFODevelopment at the the most important Bunkering Port

Source: Ship&Bunker, 2020

+26 USD/MT

Spread: Ø + 204 USD/MT

28.04.2020

Spread: Ø + 67 USD/MT Spread: Ø + 49 USD/MT

123 USD/MT

149 USD/MT


Empty Container AvailabilityRegional Differences can be seen for the Availability of 40ft Standard Container

0,0

0,2

0,4

0,6

0,8

1,0

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31

Conta

iner

Availabilit

y

2019 2020 Singapore

0,0

0,2

0,4

0,6

0,8

1,0

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31

Conta

iner

Availabilit

y

2019 2020 Shanghai0,0

0,2

0,4

0,6

0,8

1,0

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31

Conta

iner

Availabilit

y

2019 2020 Rotterdam

Source: Xchange, 2020 | Weekly Values | Values below 0,5 = Deficit of Container| Values above 0,5 = Surplus of Container

0,0

0,2

0,4

0,6

0,8

1,0

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31

Conta

iner

Availabilit

y

2019 2020

Los Angeles

US – China Phase 1 Trade DealUS cuts Tariffs on Chinese Goods & China pledges to buy more American Goods

Tariffs on Chinese Goods

• 120 bn USD: cut by half to 7,5%

• 160 bn USD: suspended

• 250 bn USD: may be rolled back in a Phase 2 Trade Deal Purchases & Retaliatory Tariffs

• 200 bn USD additional purchases over the next two years

• Retaliatory tariffs suspended



Development of Inner Asia Trade

China

India

Oceania

Singapore

Japan

Taiwan

South Korea

Traded Volumes inner Asia in mn. USD. All volumes as of June, 2020

Key Drivers

• One-Belt One-Road initiative

• Manufacturing moving in/out of China

− Political reasons

− Cost reasons

• Benefiting most from US – China dispute

− India?

− Vietnam?

− Others?

• Political & social development of India

• …


Procurement ChallengesCOVID impact, fuel price volatility and trade pattern changes increase procurement challenges

Source: Market Intelligence Initiative Global Ocean Transport

Fast changing & volatile rates

Information asymmetries

Psychological effects in negotiations

Risk management demands

Need to adapt contracts & approach

Tendering Ocean Freight 2020/2021 –Freight Procurement Excellence3.

Freight Procurement Excellence

1. Risk mitigation | Cost optimization | Network changes | Sourcing changes | Service oriented | Alternative mode & routes | Covid-19 & US-China Trade War | Benchmarking & Target Rating

2. D&D | RFQ Structure | Shipment structure | MOQ | Bunker clause | Weekly capacity guarantee

3. Freight Forwarder vs. Liner | Managing your supplier’s supplier

4. Service levels | BCP | Financial situation of LSP | Ocean Alliances

5. Budget for digitalization within your org | Spend your time wisely

6. Quarterly Business Reviews | LSP’s Corporate Strategies | Cost savings initiatives | Constant communication

6 strategies to consider for an effective ocean freight procurement exercise

Protected

RFQ strategy aligned with your company’s strategy?

Commercial terms?

Are your LSPs a good fit?

Risk mitigation

Time spent and digital transformation initiatives

Long term partnership initiatives

The Market Intelligence Initiatives: Key Approach & Benefits4.

The basic benchmark approach

Apply market know how & raise saving potentials

BENCHMARKING

Pre- & On-Carriage

(opt.

module)

Port pairs

etc.

Container types

Segment what needs to be kept apart

SEGMENTATION

Commodity / dangerous

goods

Surcharges

etc.

Rate model

Quantify what can be quantified

HARMONIZATION

Smart comparison



Benchmark Rates & Service Best Practice Analysis

Market Radarmonthly & weekly

Advisory, Expertise & Support

Conferences & Community Networking

Market Intelligence Initiative OceanYear-round Feed of Market Intelligence & Advise in Support of Ocean Transport Procurement & Management

Deeper understanding of rates & costs drivers

Strategic insights into common practices & critical markets

Indication of target rates for negotiations

Refinement of procurement strategy

Best practices on processes, portfolios & networks

Strategic & Tactical Support

Volatile markets IntransparencyNew challenges

……

Your Challenges


MII Global Ocean Transport

Rising market prices

Falling market pricesMarket prices

Freightcosts

Freight costsCommunity

member

Market prices

Freightcosts

Freight costsCommunity

member

Persistent freight costsavings


Summary & next Steps5.

Rapid tendering & service provider management

Scenario based optimization & allocation for spend & risk minimization

Marketinsights, forecasts & market outlooks

Up-to-date information on global freight rates

Expert exchange members

To summarize: What you get…


Market Intelligence Initiatives

MII Global

Ocean Transport

port-port pre-carriage on-carriage

dry cargo, reefer & tank FCL

LCL inland haulage

18,000 port pairs 6 bn $/year freight spend 7 m TEU/year

MII Europe

Road & Rail

round trip single trip unbalanced roundtrip

packed incl. reefer & bulk FTL

LTL contracted & spot

90,000 lanes 6 bn €/year freight spend 7 m FTL/year

MII North America

Truck & Intermodal

round trip single trip unbalanced roundtrip

packed incl. reefer & bulk FTL

LTL contracted & spot

30,000 lanes 4 bn $/year freight spend 4 m FTL/year

MII Global

Air Cargo

airport-airport pre-carriage on-carriage

general cargo (main & lower deck)

dangerous goods (PAX/CAO) temperature controlled

35,000 lanes 1.5 bn $/year freight spend 600 kt/year


Do you want more information

about the MIIs?

Please contact us through:

[email protected]

Or visit us under:

http://timconsult.com/en/please-contact-me/

mailto:[email protected]

http://timconsult.com/en/please-contact-me/

Webinar: Brief Update on

Transport Market

Developments – July

August 20, 2020

Register here

Upcoming Webinars & EventsTim Consult Market Intelligence Initiatives

Update Conference –

MII Europe Road & Rail

September 10, 2020

Register here

Annual Conference* –

MII Global Ocean Transport

October 08 - 09, 2020

*for MII Global Ocean Transport members only


https://www.transporeon.com/en/expertise/webinars/transport-market-developments-july-2020/?utm_source=TIM-Consult&utm_medium=EN-2020&utm_campaign=Market-Volatility&utm_content=Webinar-Transport-Market-Developments-July-EN

http://timconsult.com/en/update-conference-asia/

Thank you foryour attention.CONTACT

Clemens SchapelerInitiative [email protected]

Vivien CheongRegional Sales [email protected]

Documents

Market Intelligence Initiative Global Air Cargo...2. Monitoring Global Ocean Markets: Rates & Market Forces 3. Tendering Ocean Freight 2020/2021: Freight Procurement Excellence 4