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Expert Insights: Development, Challenges & Impacts of Container Transportation Market

2023-03-07

WBX is a must-attend event in 2023, offering a unique networking opportunity to professionals from entire breakbulk logistics supply chain. This is a perfect place to get insights, connect the community and buzz your business. We produce a series of exclusive interviews. Several veterans are invited  to share their opinions.

 

 

Interviewee Background

Zhang Yongfeng, the Secretary of the Shanghai International Shipping Research Center, a senior engineer, professor, chief consultant, young expert in the water transportation management field of the department of Transport, and recipient of the "2022 Transportation Science and Technology Talents of the year" Award. He is also the board member of the Journal of Transportation Engineering and the recipient of the 13th Shanghai Decision Consultation Research Achievement Award. 

 

Interview Briefs

》 As an expert in container shipping and breakbulk transportation sectors, how do you look at the increased capacity of container shipping and falling freight rate?

》 As regards the carbon neutrality proposed by the 20th CPC National Congress, what does it mean for the shipping industry at large?

 

Q: As an expert in container shipping and breakbulk transportation sectors, how do you look at the increased capacity of container shipping and falling freight rate?

 

A: In the past two years, the container market has undergone significant changes due to the pandemic. I previously held the view that the market has experienced continuous innovation highs, and even resulting market failure, but is now approaching a breakeven point. This irregular phenomenon during Covid-19 was triggered by the pervasion of quantitative easing policies in Europe and America, inefficiencies in the port logistics process such as port epidemic prevention issues, changes in liner company trade models, and the development of cross-border e-commerce promoted by online consumption. Looking at the current trend of the market downturn, there are already some signs of bottoming out. However, it’s still too early to conclude if the market will quickly rebound in the short term, and it will more likely fluctuate for a period of time. From the perspective of market factors, regardless from the demand side or the vitality of global economic recovery, there are some obvious signs of weakening.  I think it will take a long time to fully recover to the level before the pandemic, given the context of the pandemic.

 

Q: As regards the carbon neutrality proposed by the 20th CPC National Congress, what does it mean for the shipping industry at large?

A: For carbon neutrality and peaking carbon emissions, the 20th CPC National Congress elevates green development and also intelligent development to a higher level and points out a better pathway forward.
From a domestic perspective, what the public may be more concerned about at the moment is the Energy Efficiency Existing Ship Index (EEXI) and the carbon intensity (CI) that will come into effect. The implementation of these two indices may have some impacts on the entire industry, mainly in three aspects:
Firstly, it may cause many shipping companies to adopt certain measures, such as deceleration which is currently a preferred option.
Secondly, it may accelerate the technological transformation of outdated ships. Those ships need to be technologically upgraded to meet regulatory requirements, which may affect the present capacity allocation to a certain extent. With a few ships entering the dock, the global transport capacity and the market, I believe, can benefit from this.
Third, development of new energy sources will be shored up. Today, a growing number of ships are built to use LNG, methanol, methanol & ammonia hybrid fuels, as well as electricity. All these are new attempts made in response to the call for carbon neutrality by the 20th CPC National Congress and highlight the development trends.