Top 10 Events in the Global Shipping Industry in 2023

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1. BYD is the first to order a car transport ship as the final shipper

On January 23rd, Guangzhou Shipbuilding International, a subsidiary of China Shipbuilding Industry Corporation, announced on its official WeChat account that the construction orders for two 7000 car LNG dual fuel vehicle transport ships from BYD Group have successfully come into effect. On January 28th, the relevant person in charge of BYD responded and confirmed this order.

This order is the first car transport ship ordered by BYD as the ultimate shipper, which will break the long-standing bottleneck of European shipping companies and ensure the stability of BYD's new energy vehicle export supply. This cooperation is a good start for the cooperation between Chinese automobile manufacturing giants and world-class shipbuilding enterprises. It is also another example of both sides fully relying on their respective strengths and advantages in their respective fields to promote the coordinated development of the economy in the Guangdong Hong Kong Macao Greater Bay Area. It reflects the mission and responsibility of both sides to work together to respond to the call of building a strong transportation and shipping country, and to assist in the development of "national ships, national manufacturing, and national transportation".

On November 6th, the first ship of the BYD 7000 dual fuel vehicle transport ship project undertaken by Guangzhou Shipbuilding International started construction in Nansha, Guangzhou, with Qingdao Intercontinental Maritime Consulting Co., Ltd. (SMT) under the InterContinental Shipping Group responsible for supervision.

According to media reports on December 29th, China's automobile exports are expected to surpass Japan in 2023, ranking first in the world for the first time. According to data released by the China Association of Automobile Manufacturers, China's automobile exports reached 4.412 million units from January to November, a year-on-year increase of 58%. From January to November, Japan's automobile exports were 3.99 million units, a year-on-year increase of 15%. It is expected that the annual export volume for 2023 will only be about 4.3 million units. According to media predictions on the 27th of this month, BYD's electric vehicle sales are expected to surpass Tesla and become the world's top in the fourth quarter of 2023.

The shipping industry is not BYD's main business, and BYD's choice to build its own ships is not only a major event in the shipping industry, but also a side demonstration of China's manufacturing industry upgrading and achieving high-quality development.

2. Maersk and MSC disband 2M alliance

On January 25th, MSC and Maersk Group issued a joint statement announcing the termination of their 2M alliance cooperation by 2025.

The alliance between Maersk and MSC was established in 2015, and according to the contract at that time, the minimum cooperation period was 10 years, with a termination notice period of two years. Therefore, the two companies dissolved 2M after the minimum 10-year period ended.

Vincent Clerc, CEO of AP Moller Maersk, and Soren Toft, CEO of MSC, jointly stated, "MSC and Maersk recognize that the situation has changed significantly since the two companies signed a 10-year agreement in 2015. Terminating the 2M alliance paves the way for both companies to continue pursuing their respective strategies

In fact, there have been rumors in the market that the 2M alliance may face termination. MSC has been aggressively acquiring second-hand container ships in recent years, and the company also has the highest number of new ship orders in the world. With the gradual delivery of new ships, the company's global container ship capacity share will increase significantly, which will enable it to have independent development scale.

Subsequently, in 2023, MSC and Maersk began to decouple on multiple routes, preparing for the eventual dissolution of the alliance.

Similarly, in order to further prepare for the eventual dissolution of the alliance, MSC has also aggressively increased its capacity and expanded its business scale through various means such as acquisitions and mergers.

Analysts suggest that the dissolution of the 2M Alliance may have a greater impact on the industry.

3. After the restructuring, STX (Dalian) Shipbuilding has officially commenced operations and signed contracts with Hengli Heavy Industries!

On January 28th, Hengli Heavy Industry Industrial Park held a grand operation ceremony on Changxing Island in Dalian, marking the revitalization of idle assets that had been dormant for 10 years. Hengli Heavy Industry Group Co., Ltd. has taken a crucial step towards building a world-class green shipbuilding and high-end equipment manufacturing base.

On the day of the ceremony, Hengli Heavy Industry signed strategic cooperation agreements with well-known domestic and foreign suppliers, technical institutions, and design institutes, covering fields such as engines, steel plate supply, and intelligent ship development, and signed the first batch of ship construction orders with shipowners.

The industrial park was acquired by Hengli Heavy Industries, a subsidiary of China's Hengli Group, on July 8, 2022, at a cost of 1.729 billion yuan to acquire idle assets under the name of former South Korean STX (Dalian) Shipbuilding Co., Ltd. Later, an investment of 18 billion yuan was made to successfully acquire and restructure the former South Korean STX (Dalian) Shipbuilding, taking advantage of the global shipbuilding boom.

Hengli Heavy Industries, which has entered into operation, has received orders for the construction of 4 82000DWT bulk carriers from Fortune Ocean, 4 82000DWT bulk carriers from a well-known Greek shipowner, and 10 82000DWT Kamsarmax bulk carriers from George Procopiou.

At present, the shipyard has signed 36 new shipbuilding orders worth 1.6 billion US dollars with several well-known shipowners at home and abroad. It is expected to form a production situation of nearly 40 ships starting construction and nearly 500000 tons of steel plate processing next year.

4. Intercontinental Shipping has been listed on the main board of the Hong Kong Stock Exchange and successfully entered the list of the world's top ten ship management companies

2023 is definitely a milestone year for intercontinental shipping.

Firstly, on March 29th of this year, Intercontinental Shipping Group Holdings Limited ("Intercontinental Shipping", HK. 2409) successfully listed on the main board of the Hong Kong Stock Exchange, becoming the "first Hong Kong stock ship management company".

The listing and inclusion of Intercontinental Shipping is not only a major event for the company, but also represents the rise of China's private shipping enterprises, which is also an inevitable trend of the times.

5. The new regulations on green shipping are causing chaos in the shipping industry

On May 16th, with the publication of Regulation (EU) 2023/957 and Directive (EU) 2023/959 in the EU Official Journal, the legislation to include the shipping industry in the EU Emissions Trading System (EU ETS) finally came to an end, and the bill will officially come into effect on January 1, 2024. In the remaining six months, the EU will continue to work overtime to improve specific implementation laws, while the shipping industry is also learning and understanding, and formulating corresponding countermeasures.

The 80th session of the Maritime Environment Protection Committee (MEPC 80) of the International Maritime Organization (IMO) was held in London, UK from July 3rd to 7th. The meeting passed the newly revised "2023 Ship Greenhouse Gas Emission Reduction Strategy", proposing a new goal of "achieving net zero emissions around 2050", adding "indicative verification points" for 2030 and 2040, setting targets for the proportion of zero/near zero greenhouse gas emission technologies, fuels, and/or energy by 2030, and developing an effective timetable for a "basket" of mid-term emission reduction measures.

6. The effective date of the Hong Kong Convention is confirmed, and the Beijing Convention is officially signed

Two international conventions named after Chinese cities will both achieve milestone breakthroughs in 2023.

On June 26, 2023, with the ratification of the Hong Kong Convention by Bangladesh and Liberia, after a long wait of 14 years, all three conditions for the convention to come into effect have been met, and it will come into effect on June 26, 2025. This also means that the shipbreaking industry will be regulated globally.

From May 11th to 15th, 2009, the International Maritime Organization (IMO) held the "International Conference on Safe and Environmentally Sound Ship Recycling" in Hong Kong, China. The conference passed the first international convention named after a Chinese city - the 2009 Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (referred to as the "Hong Kong Convention"). In order to implement the concept of green environmental protection throughout the entire life cycle of ships and supervise the entire life cycle of ships from birth to dismantling yards, the Hong Kong Convention has put forward relevant requirements in the design and construction, operation, and dismantling of ships.

Subsequently, on September 5, 2023, the Beijing Convention on Judicial Sale of Ships (referred to as the "Beijing Convention") was opened for signature in Beijing. This is the first international maritime convention named after a city in mainland China, and also the first United Nations convention in the maritime field named after a Chinese city, reflecting the important contribution of Chinese maritime legal persons to the convention.

According to the Sindh Maritime Network, the convention aims to unify and coordinate the international effectiveness of judicial sales of ships, filling the long-standing gap in international maritime legislation in this field. The signing and subsequent entry into force of the convention will undoubtedly have an important impact on the shipping industry.

7. China overtakes Greece to become the world's largest shipping nation

According to Clarkson's research data in August this year, China has narrowly surpassed Greece to become the world's largest shipowner country in terms of total tonnage.

The data company stated that since 2015, the fleet size owned by Chinese shipowners has grown strongly, especially in the dry bulk and container fleets. Data shows that the GT proportion of Chinese ship owners' dry bulk fleets is 24%, while the GT proportion of container fleets is 16%.

Clarkson analyst Stephen Gordon said that the increase in China's fleet size is not surprising due to its strong freight scale, strong shipbuilding industry, and increasingly active financial industry.

According to statistics from China's shipbuilding industry, from January to November this year, China's shipbuilding completion, new orders, and orders held accounted for 50.1%, 65.9%, and 53.4% of the world market share, respectively. In addition, China's ship exports from January to November amounted to 24.4 billion US dollars, a year-on-year increase of 21.1%. Bulk carriers, oil tankers, and container ships still dominate in the export of ship products.

8. The world's first methanol fuel container ship, "Laura Maersk," has been put into operation

On September 14th, Maersk's first and world's first methanol fuel container ship, LAURA MAERSK, completed its naming ceremony in front of Maersk headquarters in Copenhagen, Denmark. Ursula von der Leyen, President of the European Commission, attended the ceremony and named the ship "Laura M ∨ rsk" as the godmother.

This world's first methanol powered container ship with a carrying capacity of 2100 TEUs was ordered by Maersk Line from Hyundai Owari Shipyard in South Korea in July 2021 and successfully launched in April of this year. In early July, Maersk signed an agreement with Hyundai Owari Shipyard in South Korea to officially take over the ship.

After delivery, the "Laura Maersk" traveled nearly 12000 nautical miles and docked at Shanghai Port in China, Singapore Port, East Side Port in Egypt, and Rotterdam Port in the Netherlands. It also conducted four green methanol injection operations in Ulsan, South Korea, Singapore, Egypt, and Rotterdam Port in Europe before returning to Denmark for naming.

On September 21st, the "Laura Maersk" set sail from Copenhagen, Denmark and officially began operations on the regular Baltic Sea route.

In addition, Maersk also announced a methanol fuel conversion plan for the world's first large container ship this year. As reported by Sindh Maritime Network, "In China! The World's First Container Ship Methanol Dual Fuel Conversion Project Signed" on October 18th this year, Maersk announced the signing of an agreement with Zhoushan Xinya Shipbuilding Co., Ltd. for the "World's First Container Ship Methanol Dual Fuel Conversion Project". According to the agreement, Xinya Company will undertake the conversion of Maersk Halifax, a 15000 TEU traditional fuel container ship from Maersk Group, into a methanol dual fuel powered vessel. This is the first such conversion in the global maritime industry.

9. Geopolitics and extreme weather in 2023 pose significant challenges to the shipping industry

The sudden outbreak of the Israeli Palestinian conflict in the second half of the year has brought great pressure to shipping companies. As the conflict continues to escalate, the Houthi armed forces in Yemen have not only targeted Israeli ships, but also indiscriminately attacked merchant ships sailing in the Red Sea region. Ships such as Maersk, Mediterranean Shipping, and Herbert have been attacked one after another.

This situation has forced shipping companies and international trade giants to release adjustment plans for the Red Sea route. Various companies have taken strategic measures such as returning, suspending, and circumnavigating the Cape of Good Hope, which not only poses great challenges to the operation of the shipping industry, but also affects the orderly environment of global trade.

Meanwhile, the climate crisis has also caused significant disruptions to the shipping industry. Due to the continuous drought this year and severe water shortage in the Panama Canal, the canal authorities have had to order a significant reduction in the daily scheduled number of ships crossing the river. Previously, the maximum daily throughput had reached 38-40 ships, but was reduced to 18 ships by February 1, 2024. The overall production capacity of the Panama Canal will be greatly reduced by half.

Although the canal authorities provided some available auction spots, the final auction price was inflated to nearly 4 million US dollars, forcing a large number of rumors to choose to turn around. A LPG transport ship named Pyxis Pioneer turned south and sailed around Cape Horn to Houston, USA, covering over 10000 nautical miles.

10. China's first domestically produced large cruise ship, the "Aida Modu", was named and delivered, with its maiden voyage starting on January 1, 2024.

On November 4th, China's first domestically produced large cruise ship, the "Aida Modu", was officially delivered and named, and is expected to make its maiden voyage on January 1st. This marks China becoming a country that gathers the "three pearls" of shipbuilding industry and can simultaneously build aircraft carriers, large liquefied natural gas transport ships, and large cruise ships.

On December 24th, the first domestically produced large cruise ship, the "Aida Modu", departed from the Wusongkou International Cruise Port in Shanghai for its first trial operation. On January 1, 2024, the first domestically produced large cruise ship, the Ida Modu, will depart from Shanghai. The first commercial voyage will depart from Shanghai Wusongkou International Cruise Port and operate an international cruise route from Shanghai to Northeast Asia.

Li Yanqing, Secretary General of the China Shipbuilding Industry Association, said that China has the ability to simultaneously build aircraft carriers, large liquefied natural gas transport ships, and large cruise ships, gathering the "three pearls" of the shipbuilding industry.

Yi Guowei, Director of the Cruise Office of China Shipbuilding Group Waigaoqiao Shipbuilding Co., Ltd., also stated that the delivery of the Aida Modu fills the last gap in China's shipbuilding industry. After completion, China's shipbuilding industry will be the only country in the world that can cover all mainstream products.