THE latest report from the Shanghai International Shipping Institute (SISI) shows that the China Shipping Prosperity Index (CSPI) in the fourth quarter of 2012 was at 88.58 points, still below the critical level of 100 points but 10.41 points higher than in the third quarter.
In this period, vessel shipping company prosperity index was at 85.85 points, below the prosperity level, but 15.69 points higher quarter on quarter. The report shows only two per cent of the carriers were optimistic about the present market situation while 33 per cent found it unsatisfactory.
The severe supply-demand imbalance has hurt ship utilisation and freight rate. Cutthroat competition between carriers, plus rising fuel and personnel costs, have caused even bigger losses to the carriers.
Port operator prosperity index was at 103.84, back to the prosperity sector again after falling out of it in the third quarter. The report said the increase in the port operator prosperity index is a result of the recovery of the Chinese economy. But the index of operating costs, charging rates and working capital of port operators all declined.
In the first quarter of 2013, the Chinese shipping industry will still be facing hardship. The CSPI for the quarter is estimated to be at 84.75 points, 3.83 points slower than in the fourth quarter of 2012.
The gloomy situation in the shipping market has lasted for more than four years and is continuing to worsen. Container carriers are struggling for survival in the depression of the dry bulk market.
The era of fast growth for ports is said to be gone forever. According to the report, 71.59 per cent's carriers consider that building new ships blindly will lead to even worse overcapacity, while 70 per cent of them expressed intent to dismantle ships this year in a bid to cut down capacity and narrow loss.