OCEAN FREIGHT

MARKET UPDATE
MARCH 2024 –
PUBLICATION DATE FEBRUARY 28TH, 2024

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Content

1 Summary

2 Market Developments

3 Demand

4 Schedule Reliability

5 Rates

6 Backup Material
Market Developments Additional Trades
GDP Growth & Bunker Prices
Carrier Financial Results
Market Volumes per Trade
Ocean Carrier Alliances

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Ocean Freight Market Outlook March 2024

Economic & Demand Outlook Capacity Outlook Freight Rates Regulations/News

• According to IMF global
economy projected to grow by
3.1% in 2024, despite potential
risk from Red Sea crisis
• Germany experienced
recession in 2023 and faces
potential recession in 2024
• US inventory-to-sales ratio
declining, driven by
wholesalers reducing
inventories. While retailers
increasing inventories.
• No reduction in Houthis' vessel • Some carriers committing to
attacks despite bombing
campaign by US Forces,
assisted in part by allied forces.
• CMA CGM now rerouting ships • Freight rates remained firm
to the Cape of Good Hope due
to tensions in the Red Sea.
Minor increase in diversions to
the Cape route since January
due to CMA CGM's decision.
• Market sentiment remains
positive after Lunar New Year
break, carriers keeping rate
gains and expecting tight
capacity in March due to
extended Red Sea diversions.
vessel delivery up to 6 months
in advance, showing
confidence in the market.
• UK Competition and Market
ahead of Lunar New Year Authority (CMA) advises not to
holidays, with transpacific renew UK liner block
rates to US West Coast exemption.
significantly higher than last
year. The Red Sea situation and
Lunar New Year contributing
to sharp increase in spot rates,
particularly impacting Asia-
Med route.
• Rates have maintained most of
their recent gains despite post
Lunar New Year slack period.

Source: DGF

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• OFR market
volume back to
Market Developments year-over-year
growth since
Orderbook by Carrier 1)
Demand Development Orderbook by Carrier3) October.
% change YoY in TEU ‘000 TEU • MSC continues to
YTD Nov:
27
18 23
19
-5% MSC 5,672 1,416 7,089 dominate
15 10
11
5 5 4
0
4 3 5 1 2 4 1 3 4 newbuilding
CMA CGM 3,616 1,161 4,778
-1 -1 0 -3 -1
orders.
-4 -4 -2
-8 -8 -6 ML 4,179 434 4,612
-10
-11 -9 -9 • Global capacity to
-14
D J M M J S N J M M J S N J M M J S N COSCO 3,095 791 3,886 grow at similar rate
’20’21 ’22 ’23
Evergreen 1,645 824 2,469
in 2024.
Orderbook by Carrier 2)
Capacity Development • Extraordinary
ONE 1,813 543 2,356
mTEU
+7%
Net addition
capacity demand in
40
HL 1,999 240 2,239 Q1 2024 due to
31.9 32.8
30 24.7 25.8 27.7 29.6 31.1
HMM 784 265 1,049
situation in the Red
22.0 23.0 23.6
20 Sea.
Zim 641 201 842
10
current
0 YML 709 78 786
2018 2019 2020 2021 2022 2023F 2024F 2025F 2026F 2027F on order

Source: 1) Accenture Cargo; 2) Drewry, net addition = delivery minus scrapping; 3) Alphaliner

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Regional Market Development – Major Trades

Market Development on Key Regional Tradelanes

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Asia Intra
N. America
EURO
Middle East
S. America
Africa

Forecast
Oceania
East MED
East MED EURO
EURO N. America
Asia
N. America Asia
S. America N. America
Demand > Capacity Demand, Capacity balanced Demand < Capacity
Source: DHL

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Demand • Global ocean cargo

demand rose +4%
YoY vs Nov’22.
Orderbook by Carrier
Global Demand Development1) Volume Development by Trade3)
• Significant growth
% change YoY in TEU % change YoY in TEU Sep-23 Oct 23 Nov-23
38 ex-Asia Pacific
4 observed in Q4’23
3
22
and early 2024
13 18 18 leading up to
14 14 14 13
-1 7
8 8 9
11
8
11 Chinese New Year.
-2 6 6 5 6 5 5
3
-4 0 0 • Reduced demand
-6
-3 -2 -3 -3
persists inbound
-3 -4
-8 -8 -9 -9 -9
-6
-7 Europe and on the
-10 -9
-11 -13 -12 -14 Transatlantic
-23 Westbound trade.
-14

Asia - Oceania

S. America - N. America
Transpacific EB

Asia - S. America

Asia - Africa
Transatlantic WB

East Med - Europe

Europe - Asia

Transpacific WB
intra Asia

Asia - Middle East

Asia - Europe

Asia - East Med

N D J F M A M J J A S O N
’22 ’23

Source: Accenture Cargo

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• Sea-Intelligence’s
January data
Schedule Reliability shows another 5
ptp drop in global
Global Schedule Reliability reliability, down to
% Reliability 51.6% triggered by
100 the situation in the
80 Red Sea.
60
• In February global
40
port congestion
20
J M M J S N J M M J S N J M M J S N J M M J S N J M M J S N J expected to ease
’19 ’20 ’21 ’22 ’23 ’24 during Lunar New
Year.
Schedule Reliability by Trade
% Reliability • Congestion
Oct 23 Nov-23 Dec 23
80 elsewhere is
60 limited, with some
delays in certain US

75%
40
73%

72%
72%

67%

67%
66%

66%
66%

66%
66%
65%
65%

65%

64%
64%

64%

64%

64%
63%

63%
62%

62%
61%
59%

59%

58%
57%

56%
56%
53%

51%

48%
46%

46%

46%
ports, like Oakland,

44%
42%

40%
20

0 Tacoma and
intra TP EB Asia - TA WB Asia - Europe - Asia - Asia - Africa N. America Asia - M.E. - Asia - S. America -
Asia Europe Middle East Asia S. America - Asia Oceania Europe East Med N. America Savannah.
Source: Sea-Intelligence, Linerlytica; intra Asia = Asia – IBPC, TP EB = Asia-NAWC, Asia-Europe = Asia-North Europe, Asia-AMLA = Asia-WCSA, AMNO-Asia = Transpacific WB, Asia-East Med
= Asia-Med
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• Heading into the

post Lunar New
Rates Year slack period
World Container Index (WCI) Shanghai Containerized Freight Index (SCFI) rates have retained
most of their
recent gains. The
WCI and SCFI
11,000 5,500
indices are 87%
10,000 5,000
9,000 4,500
and 118% higher
8,000 4,000
compared to the
7,000 3,500 same period last
6,000 3,000 year.
5,000 2,500
4,000 2,000
3,000 1,500
2,000 1,000
1,000 500
0 0
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
’20 ’21 ’22 ’23 ’24 ’20 ’21 ’22 ’23 ’24

Note: Surcharges related to e.g., equipment & space availability are not reflected in WCI & SCFI; Source: Drewry, in USD/40ft container, including BAF & THC both ends, 8 individual routes,
excluding intra-Asia routes; Shanghai Shipping Exchange, in USD/20ft ctnr & USD/40ft ctnr for US routes, including BAF, EBAF, CAF, PSS, WRS, PCS & SCS/SCF/PTF/PCC, excl. THC, 15 routes
from Shanghai
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BACKUP

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Regional Market Development – Additional Trades

Market Development on Additional Regional Tradelanes
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
EURO East MED
Africa
AMLA
Middle East
EURO
Middle East Asia

Forecast
Middle East
AMNO AMLA
EURO
AMNO
Oceania Asia
AMLA EURO
Asia
Demand > Capacity Demand, Capacity balanced Demand < Capacity
Source: DHL

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GDP Growth & Bunker Prices

GDP Growth by Region1) Bunker Prices2)

750

CAGR
2023F 2024F 2025F 2026F 2027F 700
(2024-27)

AMER 2.3% 1.4% 1.6% 1.9% 1.9% 1.8% 650

24%
ASPA 4.3% 4.1% 4.1% 4.1% 4.0% 4.1% 600
EURO 0.8% 0.9% 1.7% 1.8% 1.7% 1.7%
550
MEA 1.9% 2.7% 2.9% 3.8% 3.5% 3.4%
500

DGF World 2.5% 2.3% 2.6% 2.7% 2.7% 2.7% IFO 380
450
VLSFO
400
M A M J J A S O N D J F
’23 ’24

1) Real GDP, Copyright © IHS Markit, now part of S&P Global, Q4 2023 Update 4 Dec ‘23. All rights reserved; 2) Source: Bunkerindex, in US$

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Carrier Financial Results 9 Months 2022–23 (US$ million)

Carrier’s average profit margins fall to 1.5% in the 3rd quarter to below pre-Covid levels
Operating Profit
Revenue Operating Profit Margin Net Profit
Carrier 2022 2023 % 2022 2023 % 2022 2023 2022 2023 %
CMA CGM 2) 46’580 22’942 -51% 26’308 6’827 -74% 56.5% 29.8% 21’840 3’730 -83%

Maersk Group 7) 44’918 22’532 -50% 27’736 6’744 -76% 61.7% 29.9% 24’248 4’258 -82%

COSCO SHIPPING Holdings 5) 43’476 17’707 -59% 19’701 4’189 -79% 45.3% 23.7% 13’580 3’024 -78%

ONE 3) 18’386 7’314 -60% 11’702 1’266 -89% 63.6% 17.3% 11’019 700 -94%

Hapag-Lloyd 25’993 14’879 -43% 15’218 4’377 -71% 58.5% 29.4% 13’404 3’346 -75%

Evergreen Marine Corp. 1), 6) 16’257 6’432 -60% 10’769 933 -91% 66.2% 14.5% 9’909 1’114 -89%

Zim 10’373 3’957 -62% 6’559 -1’225 -119% 63.2% -31.0% 4’213 -2’541 -160%

HMM1) 9’848 3’911 -60% 6’012 285 -95% 61.0% 7.3% 6’049 523 -91%

Yang Ming1) 9’950 3’352 -66% 6’338 52 -99% 63.7% 1.6% 5’233 197 -96%

Wan Hai1) 6’910 2’333 -66% 3’567 -156 -104% 51.6% -6.7% 2’934 -59 -102%
Average 4) 214’305 98’045 -54% 122’208 22’026 -82% 57.0% 22.5% 101’410 13’592 -87%
Source: Alphaliner, DynaLiners; n.a. = not available, n.m. = not meaningful; 1) local currency numbers were converted into US$ using the average exchange rate for relevant financial period; 2) container
shipping segment only, excl. CEVA and Airfreight activities, Net Profit for Group; 3) result is H1 Japanese financial year, i.e. Apr-Sep not calendar year; 4) Average excluding ONE, CMA CGM; 5) COSCO
Shipping Lines and OOCL, excl. terminals; 6) not consolidated for Evergreen Group; 7) Ocean segment only; Net Profit for Group

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Demand Development 2023 – 2027

N O R T H N O R T H
A M E R I C A A M E R I C A
I n c l . 4.4 mTEU +2.7% 3.4 mTEU +3.3% I n c l .
M E X I C O F A R E A S T M E X I C O

1.6 mTEU +3.1% 14.3 mTEU +3.0% 21.4 mTEU +3.4%

2.3 mTEU 1.6 mTEU
+3.4% +3.3% 1.0 mTEU +2.4% E U R O P E 4.3 mTEU +2.1% 1.2 mTEU +3.3%
I n c l . M E D
L A T I N L A T I N
1.4 mTEU +3.0% 2.5 mTEU 7.3 mTEU 4.2 mTEU +4.1%
A M E R I C A A M E R I C A
+2.8% +4.7% INTRA ASIA
2.9 mTEU 3.4 mTEU
+3.0% +2.6% 34.9 mTEU +3.7%

GLOBAL CONTAINER TRADE M I D D L E E A S T &

1.2 mTEU 2.8 mTEU
N O R T H A F R I C A
+2.7% +2.6%
129.8 mTEU 2023e
+3.4% CAGR 2024e – 2027e I N T R A M E N A T
O C E A N I A

2.9 mTEU +3.4%

Source: Accenture Cargo Dec23 update

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State of the industry – Ocean Carrier alliances

THE ALLIANCE OCEAN ALLIANCE 2M

Date formed: Apr’17, duration: Date formed: Apr’17, duration: 10 (to discontinue in 2025)
10+3 years, earliest termination: years, earliest termination: Date formed: Nov’14, duration: 10
Apr’27, notice period: 1 year Apr’24, notice period: 1 year years, earliest termination:
Oct’24, notice period: 2 years
HAPAG-LLOYD** OOCL
ONE CMA CGM MAERSK LINE**
YANG MING CHINA COSCO SHIPPING MSC
HMM EVERGREEN

Source: Carriers; ** to become “Gemini Cooperation” in 2025

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Ocean Carrier Alliances - Gemini Cooperation

2M THE ALLIANCE OCEAN ALLIANCE
(expiry date Jan’25) (expiry date 2030, or 12 months notice period after Apr’23) (expiry date Feb’27 with 12 months notice period)

MSC Maersk Line Hapag- ONE Yang Ming HMM OOCL CMA CGM COSCO Evergreen
Lloyd (since Apr ’20) Shipping

GEMINI COOPERATION THE ALLIANCE OCEAN ALLIANCE

(Feb ’25-Jan’27)
MSC
Maersk Line Hapag-Lloyd ONE Yang Ming HMM OOCL CMA CGM COSCO Evergreen
(since Apr ’20) Shipping

• Maersk and Hapag-Lloyd have announced a new partnership called 'Gemini Cooperation' starting in February 2025.
• ‘Gemini’ will establish a ‘hub and spoke’ network with limited port calls on deep sea loops and including coverage of the
Europe - Middle East - Indian Subcontinent trade besides the East-West trades. The alliance will operate 26 mainline services
and have dedicated regional shuttles in Europe, the Middle East, Asia Pacific, and the US Gulf.
• Maersk will contribute 60% of the 'Gemini' tonnage, while Hapag-Lloyd will provide the remaining 40%, resulting in a
combined capacity of 3.4 million TEU. 'Gemini' will become the second-largest global container shipping alliance, trailing
behind the Ocean Alliance and surpassing MSC and THE Alliance.
• Aim is to achieve >90% schedule reliability by minimizing the number of port calls per loop thus ensuring faster turnaround.
Source: Carriers, Linerlytica, Alphaliner

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Acronyms and Explanations – Ocean Freight glossary

AMLA – Latin America MX - Mexico
AMNO – North America OOCL – Orient Overseas Container Line
ASPA – AsiaPacific PCC - Panama Canal Surcharge
BAF - Bunker Adjustment Factor PCS - Port Congestion Surcharge
CAF - Currency Adjustment Factor PMI - Purchase Manager Index compiled by S&P Global
CAGR – Compound Annual Growth Rate Ppt – Percentage points
East MED - Eastern Mediterranean PSS - Peak Season Surcharge
EB – Eastbound PTF - Panama Transit Surcharge
EBAF - Emergency Bunker Adjustment Factor QoQ – Quarter on quarter
ETS - European Union Emission Trading System SCF - Suez Canal Fee
EURO – Europe SCS - Suez Canal Surcharge
GDP - Gross Domestic Product SPAC - South Pacific Australia
GRI – General Rate Increase SSA – Sub-Saharan Africa
HL – Hapag-Lloyd T – Thousands
HMM – Hyundai TEU – Twenty foot equivalent unit (20‘ container)
IFO - intermediate fuel oil THC - Terminal Handling Charge
M.E. - Middle East VLSFO – Very Low-Sulphur Fuel Oil
MEA - Middle East and Africa = MENAT + SSA WB – Westbound
MENAT – Middle East and North Africa WRS – War Risk Surcharge
ML – Maersk Line YoY – Year-on-Year
mn – Millions YTD – Year-to-Date
MoM – Month-on-Month

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THANK YOU

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