OCEAN FREIGHT MARKET UPDATE

Transcription

1 DHL Global Forwarding, Freight OCEAN FREIGHT MARKET UPDATE May

2 Contents TOPIC OF THE MONTH Operational Start of Ocean Network Express (ONE) on 1 April HIGH LEVEL DEVELOPMENT MARKET OUTLOOK Freight Rates and Volume Development ECONOMIC OUTLOOK & DEMAND DEVELOPMENT CAPACITY DEVELOPMENT CARRIERS BACK-UP 2

3 Topic of the Month Operational Start of Ocean Network Express (ONE) on 1 April O N E H A S C O M M E N C E D O P E R A T I N G A S S C H E D U L E D ONE combines the container operations of three Japanese carriers K Line, MOL and NYK in a new entity and is part of THE Alliance According to Alphaliner data the new carrier operates a fleet of 230 containerships with a total capacity of TEU with NYK being the largest contributor with 90 ships with a total capacity of TEU. The newly combined fleet gives ONE a global capacity share of 6.8%, making them the 6th largest carrier in the world The three shareholders have also announced completion of a USD 3bn cash investment into ONE with 31% contributed by K line, 31% by MOL and 38% by NYK, all made fully in cash. The new joint venture was established as Ocean Network Express Holdings Ltd in Tokyo. Operations are however managed from Singapore by Ocean Network Express Pte Ltd. ONE has selected magenta as its brand color, thus standing our from the usual colors used in the industry like blue and red Source: Alphaliner, carrier, DHL 3

4 High Level Market Development Supply and Demand ECONOMIC OUTLOOK GDP GROWTH BY REGION 1) DHL TRADE BAROMETER 6) SUPPLY/DEMAND GROWTH (ANNUALIZED), IN % 2) 2017F 2018F 2019F 2020F 2021F CAGR ( ) EURO 2.4% 2.4% 2.0% 1.9% 1.8% 1.9% MEA 3.3% 3.4% 3.6% 3.8% 3.7% 3.7% AMER 2.2% 2.6% 2.7% 2.3% 2.1% 2.4% ASPA 5.0% 5.0% 4.8% 4.7% 4.8% 4.8% DGF World 3.3% 3.4% 3.3% 3.1% 3.1% 3.2% Q1 '16 Q2 Q3 Q1 '17 Ocean Global Q2 Q3 Q1 '18 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Demand Growth % Supply Growth % F 2019F 2020F 2021F WORLD CONTAINER INDEX (WCI) 3) SHANGHAI CONTAINERIZED FREIGHT INDEX (SCFI) 4) Q1 16 Q2 Q3 Q1 17 BIX 380 Q2 BIX Q3 MGO Q Q1 16 Q2 Q3 1)real GDP, Global Insight, Copyright IHS, Q All rights reserved 2) Demand growth = Port-to-Port Container Traffic growth. Supply growth = Fleet Growth. Source: Drewry Maritime Research. 3) Shanghai Shipping Exchange, in USD/20ft container & USD/40ft ctnr for US routes, 15 routes from Shanghai. 4) Global Insight, Drewry, 5) Bunker Index, in USD/metric ton, Bunker Index MGO (BIX MGO) = avg. Global Bunker Price for marine gasoil (MGO) port prices; (BIX 380= avg. Global Bunker Price for all 380 centistoke (cst) port prices; both index published on the Bunker Index website., 6) DHL Global Trade Barometer Mar18, index value represents weighted average of current growth and upcoming two months of trade, a value at 50 is considered neutral, expanding above 50, and shrinking below 50. Q1 17 Q2 Q3 Q1 18 BUNKER PRICE INDEX 5) Q1 16 Q2 Q3 Q1 17 Q2 Q3 BIX 360 BIX MGO Q1 18 4

5 Market Outlook May 2018 Major Trades Capacity reductions and blank sailings on most ASPA outbound lanes support the announced GRIs EXPORT REGION IMPORT REGION CAPACITY RATE EURO AMNO = + AMLA = =/+ ASPA + =/- MENAT = = SSA = = EXPORT REGION IMPORT REGION CAPACITY RATE AMLA AMNO = = ASPA + = EURO + = MENAT = = SSA - + AMNO AMLA = + ASPA = = ASPA ASPA - + AMNO + + EURO = + AMLA + - MENAT = + EURO - + SSA = = MENAT - + KEY Strong Increase ++ Moderate Increase + No Change = Moderate Decline - Strong Decline - - OCEANIA = = Source: DGF 5

6 Market Outlook April 2018 Ocean Freight Rates Major Trades Market outlook on smaller trades available in the back-up O C E A N F R E I G H T R A T E S O U T L O O K ASPA EURO EURO ASPA & MEA ASPA AMLA ASPA AMNO EURO AMNO ASPA MENAT ASPA ASPA AMNO EURO Source: DGF A new round of GRI s are announced for the month of May and rates are expected to increase due to an overall capacity reduction and blank sailings. Market showing signs of softening; space is back and the carriers are looking for high volume cargo to fill gaps left open by the recyclables. Rates to MX/WCSA have reached 3-digit level, and carriers have introduced several blank sailing to bring up the rates. We can expect some rate recovery in mid-may ECSA do not have major space injection and rate is stable at the moment. Ocean alliance has announced 1 blank sailing into USWC early May. With TP contract renewal commencing May 1 st, most carriers have announced May 1 st /15 th GRI in an effort to raise the spot rate levels. Space is getting really tight and carriers have started to push up the rates. Additional increases are also affecting the Ramps / Inland locations. Carriers have implemented few GRI for the month of May. Rates have been declining into EMED and Middle East, and in order to push through GRI, Carriers have now introduced several blank sailings from End April till May. The May GRI has been announced for the IPBC trade. Vessel schedules have been affected by the recent bad weather in Shanghai. The delays have led to some space issues from this port of loading. Most services are running full leading to rate increases for Q2. Carriers are increasing their door rates in their tariffs. 6

7 Economic Outlook & Demand Development Even a limited tariff war could begin to wear down global economic growth EURO AMNO EU s growth is still solid, but softening. Recent data on inflation, output, and retail sales have been disappointing. The European Central Bank (ECB) removed its easing bias in early March, sounding more confident that medium-term core inflation will pick up. Yet, cautious withdrawal of stimulus is still the most likely scenario. Meanwhile, high inflation, a strengthening currency, and continued uncertainty about the path of Brexit mean UK growth is likely to slip. Consumer spending slowed sharply early this year in the US. Recently legislated tax cuts and new federal spending will however aid GDP growth for the rest of the year. The announced tariffs will have a negative, but probably small, impact on growth. Moreover, numerous exemptions and carve-outs from these tariffs will likely mitigate their effect. ASPA JP: early data suggest a further softening GDP growth in Q1 18 with residential investment declining, consumer spending restrained by heavy snowfalls, and imports outpacing exports. CN: the three rounds of tariffs proposed by the US and the two rounds proposed by CN are highly dangerous. If it is the prelude to an all-out trade war, then the damage to US, CN, and global growth could be substantial. However, this scenario looks unlikely. EMERGING MARKETS DEMAND DEVELOPMENT If the tariffs announced by the US and CN take effect, there could be sizeable impacts on global supply chains. The shares of exports going from Asian economies (AU, KR, JP, ID) to CN are substantial, making them particularly vulnerable. Value added by some countries (e.g. TW, MY, SG) to CN exports going to the US is also large. Tariffs on CN aerospace, automotive, machinery, information technology industries could help China s competitors in DE, JP, MX. Chinese tariffs on US agricultural products could benefit BR and could lift demand for substitutes such as palm oil products, helping ID & MY. In March, global business optimism dropped sharply to the weakest level in over a year. The Global PMI fell, for the 1 st time in six months, down sharply from 54.8 in February to a 16-month low of The 1.5-index-point drop was the steepest for two years. Weaker business sentiment was seen in all four of the largest developed economies (EU, UK, JKP, US). Source: IHS Markit Global Executive Summary, IHS Purchasing Manager Index Manufacturing, a PMI at 50 is considered neutral, expanding above 50, and business shrinking below 50. 7

8 Capacity Development 1/3 C A P A C I T Y D E V E L O P M E N T Containership scrapping activity has slowed dramatically from the frenetic pace of 2016 and early 2017, with only 12 ships for 21,778 TEU sold for recycling so far this year. Full-year scrapping estimates for 2018 have been adjusted to only 200,000 TEU and this number could be revised downwards further if the currently slow pace of ship-breaking does not pick up in the coming months. 413,982 TEU of container tonnage were recycled in 2017 and 654,862 in A further reduction in the rate of vessel scrapping could therefore make this year s container ship-breaking volume the lowest in record since With more than 1.00 M TEU of new container ship capacity still due for delivery between April and December this year, the reduced rate of scrapping has pushed full-year capacity growth estimates up to 6.0%. The total cellular vessel fleet is thus expected to reach M TEU by the end of the year, compared to M TEU at the beginning of Source: Alphaliner, carriers While the overall idle containership capacity has been reduced significantly from a record high of 1.60 MTEU in October 2016 to 340,000 TEU as of today, the overall market remains delicate with any slackening in demand threatening to disrupt the fragile recovery in the containership charter markets, even as freight rates have started to tumble under the pressure of excess supply. 8

9 Capacity Development 2/3 C A P A C I T Y D E V E L O P M E N T COSCO and Gold Star Line (GSL) will introduce in early May a dedicated Far East South Africa service that will directly connect China with South Africa while wayporting in the Straits in both directions to further connect with their respective South East Asia networks. COSCO will market the service as ZAX3 while GSL will use the SA1 appellation. The service will turn in 9 weeks. It will initially deploy 8 ships of 4,200 TEU providing weekly fixed day sailings with one sailing skipped. The first effective sailing is scheduled on 8 May. In the southbound direction, it will be the only container service offering a direct connection from Xingang, Qingdao and Nansha to Durban and Port Elizabeth, compared to rival services that currently offer these links via transhipment. APL (CMA CGM Group) has unveiled its new Transpacific offer, effective from May this year. 2 weekly loops will be added to the network, bringing to 24 the number of loops APL operates between Asia and North America. The changes come within a wider service restructuring, unveiled in December by the OCEAN Alliance partners. Maersk Line and Hamburg Süd are to withdraw their newly-launched AC-5/ASCA service, that focuses on the Far East NCSA Caribbean trade, after just 6 sailings. According to a Maersk customer announcement, the loop will be replaced by a revised service starting on 14 May. The revised service will be offered through an arrangement on the existing East Asia Mexico Caribbean NCSA service operated jointly by CMA CGM, COSCO, Hapag-Lloyd and Hamburg Süd. Hamburg Süd is to leave the service later this year further to Korea s Fair Trade Commission decision for Maersk s acquisition of Hamburg Süd. The new AC- 5/ASCA service was launched in this context. Maersk and Hamburg Süd will co-load temporarily on the existing service until withdrawing, presumably this summer, to continue to serve the Fare East NCSA-Caribbean trade separately to comply with the Korea decision. HMM has officially announced its plans for a newbuilding program of 20 eco-friendly large containerships totaling over 350,000 TEU, comprising 12 Megamax units of over 20,000 TEU, aimed at the Fare East-Europe trade, and 8 maxi-neo-panamaxes of 14,000 TEU, aimed at the Far-East-USEC trade. The announcement comes in the context of a Korean government s 5 Year Plan for Rebuilding Korean Shipping involving HMM as Korea s flagship carrier. Source: Alphaliner, carriers 9

10 Capacity Development 3/3 C A P A C I T Y D E V E L O P M E N T COSCO Shipping has received the COSCO SHIPPING GEMINI 20,119 TEU, the 3 rd unit of a Megamax newbuilding program totaling 17 vessels of 19,000-21,000 TEU. The COSCO SHIPPING GEMINI was built by the Shanghai Waigaoqiao Shipbuilding (CSSC) and joined OCEAN Alliance Asia-Europe NEU2 loop on 14 April. The COSCO SHIPPING LEO 19,273 TEU (4th of the Megamax newbuilding program), was also finally delivered to COSCO Shipping. Her phasing in, had to be postponed by 2 weeks after a collision with a cargo vessel while on final sea trials. The COSCO SHIPPING LEO has also joined the OCEAN Alliance Asia-Europe NEU2 loop on 28 April. Evergreen has taken in charge the EVER GOLDEN, 1st of 11 20,160 TEU megamax ULCS contracted in October 2015 from Japan s Imabari Group. The EVER GOLDEN was delivered on 30 March and sailed from Japan to Qingdao in ballast to join the OCEAN Alliance Asia Europe loop NEU3. The idle containership fleet of over 500 TEU has fallen to 84 units for 294,282 TEU as at 16 April, with continued strong demand for fresh tonnage pushing down the idle fleet figures. The idle fleet now stands at 1.4% of the total cellular fleet, compared to 2.9% (626,996 TEU) a month ago. Carriers are pushing ahead with the launch of new services and with vessel upgrades on various services for the summer, which will continue to draw on the current idle fleet. Most of the existing idle ships of above 5,000 TEU are expected to return to service in the coming weeks, which will further push down the idle fleet numbers. Charter rates continue to strengthen and the availability of spot tonnage is shrinking. Source: Alphaliner, carriers 10

11 Carriers (1/2) C A R R I E R S COSCO Shipping announced, together with joint-acquirer SIPG, a general cash offer to acquire OOIL (Orient Overseas International Ltd.) on 7 July The COSCO OOIL deal has already passed 3 pre-conditions including the anti-trust reviews in the US (on 23 October 2017) and the EU (on 5 December 2017) and the approval of COSCO Shipping Holdings shareholders (on 16 October 2017). However it still requires approval from the Committee on Foreign Investment in the United States (CFIUS) and from the Chinese regulators (MOFCOM and NDRC). According to the OOIL offer document submitted by COSCO, the deal has to be completed by 30 June OOIL will receive a break fee of $253 M if COSCO fails to complete the deal by the deadline. However the fee will be waived if the transaction failed to meet the requirements of CFIUS, even though the CFIUS clearance was not listed as 1 of the 5 pre-conditions for the offer from COSCO. The main issue at stake is OOCL s Long Beach Container Terminal (LBCT), viewed as one of OOIL s key assets, which will come under COSCO s control upon completion of the OOIL takeover. A key question is, whether COSCO s control of the fully-automated terminal on the US West Coast, with 40-year lease expiring in 2052 that is worth $4.6 Bn in total, could harm US national security interests. COSCO already controls two separate container terminals in the Los Angeles-Long Beach San Pedro Bay area. COSCO has confirmed beginning of April, that they are still in discussions with the US Treasury Department s CFIUS, with attention apparently focused on COSCO and OOIL s US terminal assets. However, COSCO officials maintained that they expect the deal to close before the 30 June deadline. 11

12 Carriers (2/2) C A R R I E R S - Financial performance FY 2017 The container shipping operations of 13 of the top 15 carriers recorded an aggregated operating income of $3.28 Bn in 2017, compared to combined operating losses of -$4.19 Bn in 2016*. The combined revenues from the container shipping operations of the carriers surveyed reached $112 Bn in 2017, compared to $97 Bn in 2016, for a growth of 14.9%. Average operating margins of 2.0% in 2017, based on a simple average calculation of the carriers surveyed, or 2.9% based on cumulative average, was the highest for the carriers since However the recovery has stuttered as carriers average operating margins slumped in the 4 th Q 2017 to only 0.9% from a high of 5.0% in the 3 rd Q. The negative trend has continued into the 1 st Q 2018 as carriers faced falling freight rates, lower capacity utilization as well as rising fuel and vessel charter costs. The backhaul freight rates, which surged in 2017 and helped to push up carriers margins last year, have also fallen back and look set to come under further pressure. The impact of a looming US-China trade war on container volumes also remains to be assessed. FY 2017 Average revenue by carrier 2017 vs 2016 *incl losses incurred by Hanjin Shipping which filed insolvency in Aug 2016 / Source: Alphaliner, carriers 12

13 B A C K - UP 13

14 Market Outlook April 2018 Ocean Freight Rates Additional Trades (1/2) O C E A N F R E I G H T R A T E S O U T L O O K EURO AMLA Carriers are reporting fully booked vessels and rollings are taking place. Pre-bookings well in advance are recommended. Rates are remaining stable for now, but intentions for further increases are still in place. EURO SSA Rates remain stable and space is available.. AMNO MENAT AMNO SSA AMNO AMLA AMLA Exports AMNO ASPA Rates are in the rise approx. $50/TEU with major carriers. Space is a major issue especially from US Gulf Coast and USEC is also heavy With bookings are out 4-5 weeks No Space issues or service changes on USA to South & West Africa services Rates are stable with no increase/decrease expected until new year or in the first quarter of 2018 Rates ticking upward USA to WCSA. Direct carrier GRI action applied April. US to ECSA capacity slowly tightening, GRI s announced but postpone 3 months running. US to CENAC/Caribbean stable w/new Gulf-CENAC service stressing stable capacity. No space/container rolls SAWC to all destinations, equipment deficits at Colombia CY s Bookings need 4-6 weeks in advance from vessel departure; Commodity season starts in April and rates will increase again Space is tight for all carriers and pre-booking 2-3 weeks in advance is recommended. Pocket issues of equipment deficit in IPI location. Source: DGF 14

15 Market Outlook April2018 Ocean Freight Rates Additional Trades (2/2) O C E A N F R E I G H T R A T E S O U T L O O K EURO MED - AMNO EUR MED AMLA EURO MED ASPA EURO MED MENAT EURO MED SSA ASPA-SPAC Increases will occur during April (PSS/rate increases/costs connected to US deliveries) Stable/some increases depending on service and provider Stable/some increases depending on service and provider Stable/some increases depending on service and provider Unchanged/Stable All carrier are seen to extend/reduce rates from April to at least first half of May. Only 1 carrier, Hamburg Sud has announced a planned GRI in mid May. Source: DGF 15

16 Carriers Drewry s Altman Z-Score as of 1 April 2018 Company Period Period Ended Units Net Sales EBIT Assets Book Value Liabilities Total Current of Equity Total Current Retained Earnings Z-Score OOIL 1) Annual 31. Dez 17 million US$ 6' '069 2'965 4'683 5'387 1'380 4' CMA CGM Annual 31. Dez 17 million US$ 21'116 1'574 19'657 5'624 5'644 14'013 5'956 4' AP Moller-Maersk Annual 31. Dez 17 million US$ 30' '227 24'081 31'425 31'802 14'757 26' Wan Hai 9 months 30. Sep 17 million NT$ 44'970 2'480 75'688 30'509 34'074 41'614 20'588 11' NYK group 9 months 31. Dez 17 billion Yen 1' ' ' K Line group 9 months 31. Dez 17 billion Yen ' China Cosco 2) 9 months 30. Sep 17 million RMB 67'599 4' '443 45'728 42'981 89'462 42'854 32' Evergreen Marine Corp 9 months 30. Sep 17 million NT$ 113'068 5' '384 62'178 59' '359 45'053 11' MOL group 9 months 31. Dez 17 billion Yen 1' ' ' Hapag-Lloyd Holding 9 months 30. Sep 17 million euro 7' '817 2'840 5'780 10'037 3'323 3' Pacific International Lines 6 months 30. Jun 17 million US$ 1' '698 1'290 1'804 3'894 1'907 1' Yang Ming 9 months 30. Sep 17 million NT$ 99' '096 24'696 17' '426 44'536-1' Hyundai Merchant Marine 9 months 30. Sep 17 billion Won 3' '442 1' ' ' Zim Annual 31. Dez 17 million US$ 2' ' ' ' The Z-Score is a statistical analysis to predict a company s probability of failure in the next two years, using data from the company s financial statement. Z-Score 2.99 = company is safe ; Z-Score between 1.8 and 2.99 = exercise caution ( grey zone ); Z-Score 1.8 = Higher risk of the company going bankrupt ( distress zone ) Source: Drewry Sea & Air Shipper Insight February 2018, 1) parent of OOCL, 2) parent of Cosco Container Lines; Z-score is calculated as follows: T1 = (Current Assets - Current Liabilities) / Total Assets, T2 = Retained Earnings / Total Assets, T3 = Annualized EBIT / Total Assets, T4 = Book Value of Equity / Total Liabilities, T5 = Annualized Sales / Total Assets, Z-score bankruptcy rating = 1.2*T *T *T *T *T5 16

17 Topic of the Month Top 12 Carriers by Operated Capacity (in Mil. TEU), December After triggering regulatory approval processes in 23 jurisdictions, Maersk finally aquired Hamburg Süd. Over the next five months, Maerk will terminate some of Hamburg Süd s overlapping services on certain trades APM- Maersk, Hamburg Süd MSC Source: Alphaliner, incl. pending mergers COSCO, OOCL CMA CGM, Mercosul Hapag-Lloyd ONE (NYK, MOL, K Line) Evergreen Yang Ming PIL Zim HMM Wan Hai 17

18 Market Outlook Volume Outlook in Main Trade Lanes, 2017 Estimate & 2018/21Growth Forecast in % 2017e, in mteu 2018e-2021e CAGR, in % N O R T H A M E R I C A I n c l. M E X I C O 3.5 mteu +0.5% F A R E A S T 7.8 mteu +1.6% N O R T H A M E R I C A I n c l. M E X I C O 1.7 mteu +0.4% 11.9 mteu +1.8% 16.2 mteu +2.3% 2.5 mteu +2.4% 2.0 mteu +1.8% L A T I N A M E R I C A 1.7 mteu +3.1% 2.0 mteu +3.1% E U R O P E I n c l. M E D 7.2 mteu +2.4% I N T R A A S I A excl. Oceania 1.8 mteu +0.9% 4.6 mteu +2.7% L A T I N A M E R I C A 35.6 mteu +3.6% G L O B A L C O N T A I N E R T R A D E e m T E U % C A G R 2018e- 2021e Mid-term growth is mainly driven by Asian tradelanes. Source: Seabury Nov17 update 18

19 Global Capacity Development all Trades Highest scrapping level ever [TTEU] Average age % Idling remains high [TTEU] 1, % ,359 1,324 Returning capacity well absorbed by demand 602 (May 2018) Net capacity growth remains low Net capacity growth 2017E 7.7% -1.8% 2.7% -3.3% Apr 17 YTD Scheduled Post-ponements capacity growth Scrapping Net capacity growth Very few deliveries expected post Orders placed by year [TEU m] Vessel deliveries by year [TEU m] ,300 TEU % Source: Alphaliner (May 2017), carrier views Apr17 YTD E 19

20 Carrier Mergers, Acquisitions and Alliances China Shipping Cosco OOCL TBC Evergreen M E R G E R S A N D A Q U I S I T I O N S APL CMA CGM Hapag Lloyd United Arab Shipping Hyundai Merchant Marine Hamburg Süd Maersk Line MSC K Line MOL NYK CHINA COSCO SHIPPING EVER GREEN CMA CGM HAPAG-LLOYD/UASC HYUNDAI MERCHANT MARINE MAERSK LINE MSC OCEAN NETWORK EXPRESS (ONE) Yang Ming YANG MING Hanjin Shipping Bankrupt A L L I A N C E S F O R M E R A L L I A N C E S P R E S E N T A L L I A N C E S 2M MAERSK LINE MSC OCEAN 3 CMA CGM CHINA SHIPPING UNITED ARAB SHIPPING COMPANY 2M MAERSK LINE MSC HMM (strategic cooperation) OCEAN ALLIANCE OOCL CMA CGM CHINA COSCO SHIPPING EVERGREEN G6 HAPAG-LLOYD MOL NYK APL HYUNDAI MERCHANT MARINE OOCL CKYHE COSCO EVERGREEN HANJIN SHPPING K-LINE YANG MING THE ALLIANCE HAPAG-LLOYD/UASC ONE YANG MING Source: Carriers 20

21 Acronyms and Explanations 2M - Carrier Alliance: Maersk / MSC AMLA - Latin America AMNO - North America AR - Argentina ASPA - AsiaPacific BR - Brazil CAGR - Compound Annual Growth Rate CENAC - Central Amercia and Caribbean CKYHE - Carrier Alliance: Cosco, K-Line, YangMing, Hanjin and Evergreen CNC - CNC Line (Cheng Lie Navigation Co. Ltd.) DG - Dangerous Goods DWT - Dead Weight Tonnage EB - Eastbound ECSA - East Coast South America EURO - Europe FMC - US Federal Marine Commission G6 - Carrier Alliance: APL, Hapag Lloyd, Hyundai, MOL, NYK and OOCL GRI - General Rate Increase HJS - Hanjin Shipping HMM - Hyundai HSUD - Hamburg Süd HWS - Heavy Weight Surcharge IA - Intra Asia IPBC - India Pakistan Bangladesh Colombo IPI - Inland Point Intermodal ISC - Indian Sub Continent MENAT - Middle East and North Africa mn - Millions MoM - Month-on-Month NOO - Non-operating (vessel) owners Ocean 3 - Carrier Alliance: CMA, UASC, China Shipping OCRS - Operational Cost Recovery surcharge OWS - Overweight Surcharge PH - Philippines PNW - Pacific North West Ppt. - Percentage points PSW - Pacific South West RR(I) - Rate Restoration SAEC - South America East Coast SAWC - South America West Coast SOLAS - Safety of Life at Sea SPRC - South People s Republic of China South China SSA - Sub-Saharan Africa SSL - Steam Ship Line T - Thousands TEU - Twenty foot equivalent unit (20 container) TP - Trans Pacific TSA - Trans Pacific Stabilization Agreement ULCS - Ultra Large Container Ship USGC - US Gulf Coast US FMC - US Federal Maritime Commission USEC - US East Coast USWC - US West Coast VGM - Verified Gross Mass VLCS - Very Large Container Ship VSA - Vessel Sharing Agreement WB - Westbound WCSA - West Coast South America YML - Yang Ming Line YoY - Year-on-Year YTD - Year-to-Date 21