Market Slump has Likely Passed – Wallenius Wilhelmsen

2212

Car and vehicle shipper Wallenius Wilhelmsen Logistics Asa CEO Craig Jasienski told the company’s Q3 earnings call:

  • The bottom of the market has probably passed. That’s what we definitely see, even if the third quarter in itself was on the soft side.
  • We see a positive development in rates in terms of consolidated revenue per cubic meter but this is more driven by cargo and trade mix than actual prices in the market.
  • Actual prices in the market are still under tremendous pressure.
  • The supply-demand situation is tightening up but there is still a gap. We are still oversupplied by nearly 800.000 CEU (car equivalent units) of vessel capacity in the market place.
  • Current fleet growth is only 1 percent, less than it should be given that a newbuilding capacity of about 3 percent should be coming in just for renewal to retain the current fleet.
  • That will help tightening, but it won’t happen in a hurry because of the oversupply situation.
  • We still have some way to go. Q4 looks pretty tight if you look at the market but Q1 will loosen up again. So in the next two years that we can see on the horizon, we are still oversupplied and that will result in continued pressure on prices.
  • We still have a way to go before we really tighten up the global fleet.
  • Wallenius Wilhelmsen late on Tuesday posted forecast-beating third-quarter earnings

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Source: Reuters (Reporting by Joachim Dagenborg, editing by Terje Solsvik)

Reference: Times of India

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