According to an analysis of Xeneta’s Carbon Emissions Index (CEI), Yang Ming is the “emission hero” for the container business for all pertinent CEI-covered trades in Q4 2022. The only sign company in the sector to receive a score below the CEI performance baseline of 100 (established in Q1 2018) for all CEI routes was the Taiwanese behemoth, as reported by Xinde Marine.
Yang Ming discovered the optimum trade-off between sailing speed, fill factor, and vessel size in the industry, according to the CEI, a novel solution from Xeneta and Marine Benchmark. Overall, the segment did not do well, with some increases being partially offset by bad performances due to the weak market’s effects on filling factors, which in turn reduced total efficiency.
Empowering green shipping
The CEI was introduced last year to give international shippers the information they need to choose “green shipping” for their shipments. The index, which tracks movements and computes emission footprints, covers 13* of the key routes for liners and is based on real-time AIS data and specific vessel details. Scores for carriers are based on the trade lane average at the beginning of 2018.
Generally, the sector is moving in the right direction, according to Xeneta Shipping Analyst Emily Stausbll, but the disparate scores illustrate that growth is far from simple.
Market victims
The US East Coast to North Europe trade, with a CEI of 108, is the only one with a greater CEI for Q4 2022 than Q1 2018, according to her. “Unfortunately, we are experiencing some quarter-over-quarter losses, such as on transactions coming out of the Far East, where four out of the five primary trades had their CEI ratings decline (rise). We must take into account market conditions generally to determine why.”
Poor fundamentals have affected demand and volumes, she continues. As a result, filling factors have decreased by 4.5 percentage points outside of the Far East. Efficiency suffers as a result because there hasn’t been a reduction in speed to offset this (and thus, emissions). As a result, CEIs on these significant front-haul deals rose on average by 6%. But, and this is a big “but,” all of these trades are still increasing when compared to their performance in 2018, with ratings rising by 3.4% to 15.7%.
“Consequently, even though much has been accomplished, much more still has to be done.”
Trade insights
According to the CEI, most trades experienced a decrease in speed as a result of the deteriorating market circumstances. The best performers decreased their pace by a sufficient amount to compensate for lower filling factors, whereas those who did not do poorly.
The transaction from the Far East to the US East Coast that had a CEI of 84.3 in Q4 2022 was the one that made the biggest green steps ahead (against the baseline). This was accomplished by increasing the average vessel size by 8.5%, decreasing the average speed by 8.9% (down 1.5 knots), and increasing the filling factor by 0.4 percentage points. Although this last number is negligible, it demonstrates that carriers have been successful in filling the larger vessels.
From the corridors to the specific carriers, Stausbøll asserts that there is a clear victor among the leading companies in the sector.
Yang Ming Impresses
She claims that Yang Ming has demonstrated its dedication and expertise in raising its environmental profile. Yang Ming’s highest score for the quarter was 97.5 between North Europe and the Far East, whereas all the other carriers achieved over 100 on at least one trade. On the Far East to US East Coastline, they achieved a remarkable 60.85 CEI figure, which is at the other extreme of the scale.
This kind of performance can produce a meaningful competitive advantage in a market that is becoming more and more ESG-focused. At the end of the day, it doesn’t simply benefit the environment; it also positions them favourably in what is and is likely to remain a very competitive market. No doubt, other carriers will pay attention. In the next months, keep an eye on the CEI to see how they react.
Did you subscribe to our newsletter?
It’s free! Click here to subscribe!
Source: Xinde Marine
