CMA CGM- 2015 3rd quarter results

CMA CGM announced their 3rd quarter 2015 results.  The operating profit for 3rd quarter 2015 is
less than the 3rd quarter of 2014.   Here are some details from their web-site.

MD&A 30th of September 2015 versus 30th of September 2014 

 Operating revenue General:

Consolidated operating revenue decreased by USD 408.5 million, or 3.3% from USD 12,509.1 million in the first 9 months of 2014 to USD 12,100.6 million in the first 9 months of 2015 primarily due to a 3.9% decrease in shipping revenue and a 5.3% increase in other activities. Transported volumes increased by 6.5% or 593 thousand TEU, from 9,110 thousand TEU in the first 9 months of 2014 to 9,703 thousand TEU in the first 9 months of 2015. 

click here for link to complete summary

And, from the finance report

OPERATING PROFIT BEFORE GAINS ON DISPOSAL OF PROPERTY AND EQUIPMENT AND SUBSIDIARIES, DEPRECIATION & AMORTIZATION, etc.

            For the nine-month period ended                            For the three-month period ended
                 2015                          2014                             2015                       2014

                1,137.8                      876.4                             243.7                      325.1

As you can see, the first 9 months the profit increased, but for the 3rd quarter is decreased compared\
to 2014.  This does not bode well for end year 2015 results.

click here for link to finance report

Scorpio Bulkers Inc. - one-for-twelve reverse stock split

Press Release from Scorpio Bulkers

Scorpio Bulkers Inc. Announces Reverse Stock Split to Be Effective December 31, 2015
MONACO--(Marketwired - Dec 30, 2015) - Scorpio Bulkers Inc. (NYSE: SALT) (the "Company" or "Scorpio Bulkers") announced today that its board of directors (the "Board") has determined to effect a one-for-twelve reverse stock split of the Company's common shares, par value $0.01 per share, and a reduction in the total number of authorized common shares to 56,250,000 shares. The Company's shareholders approved the reverse stock split and change in authorized common shares at the Company's special meeting of shareholders held on December 23, 2015.
The reverse stock split will take effect, and the Company's common shares will begin trading on a split-adjusted basis on the New York Stock Exchange ("NYSE") as of the opening of trading on December 31, 2015. A new CUSIP number will be assigned to the Company's common shares when the reverse stock split becomes effective.
When the reverse stock split becomes effective, every twelve of the Company's issued and outstanding common shares will be combined into one issued and outstanding common share, without any change to the par value per share. This will reduce the number of outstanding common shares from approximately 344.2 million shares to approximately 28.7 million shares.
No fractional shares will be issued in connection with the reverse stock split. Shareholders who would otherwise hold a fraction of a common share of the Company will receive a cash payment in lieu thereof at a price equal to that fraction of a shares to which the shareholder would otherwise be entitled, multiplied by the closing price of the Company's common shares on the NYSE on December 30, 2015.
Shareholders with shares held in book-entry form or through a bank, broker, or other nominee are not required to take any action and will see the impact of the reverse stock split reflected in their accounts on or after December 31, 2015. Such beneficial holders may contact their bank, broker, or nominee for more information.
On December 17, 2015, the Company received notice from the NYSE that the Company was no longer in compliance with the NYSE's continued listing standards because the average closing share price of its common shares over a consecutive 30 trading-day period ending December 15, 2015 has fallen below the requirement to be at least $1.00 per share. The purpose for seeking shareholder approval to effect the reverse stock split was to increase the market price of the Company's common shares. The Compapany believes that the increased market price for its common shares that is expected as a result of implementing the reverse stock split will cure this deficiency.

In a separate release, Scorpio announced the sale of 5 vessels, 2 of which are still being built.  

It appears the management is doing everything they can to hang on.  The question is, will it be enough?

New Rules for container weighing

As from July 1, 2016 the International Maritime Organization (IMO) amendments to the Safety of Life at Sea (SOLAS) Convention requires the shipper of a packed container to provide the container`s verified gross mass (VGM) prior to stowage aboard ship.

This is VERY IMPORTANT.  Beginning July 1, 2016, shippers will be required to VERIFY the
weight of the contents and packaging inside the container they deliver to be shipped.

Here is a link to the brochure published by The World Shipping Council.

http://www.worldshipping.org/industry-issues/safety/faqs/SOLAS_VGM__Industry_FAQs_Dec_2015_US_letter_WEB.pdf

Christmas at sea and in the port of Hamburg | Traditions and customs

Mergers Ahead

Now that CMA CGM will purchase NOL (APL), and China Shipping and COSCO are set to merge,
what will be the next mergers?

Hapag Lloyd was looking to buy NOL, but lost out to CMA CGM, so will Hapag Lloyd be looking for another line to acquire?

Who are the likely candidates?

A merger between the two Korean companies, Hyundai Merchant Marine and Hanjin Shipping is possible. Even though the stock of each company is traded on the Korean stock exchange, somehow I think the government would not let either company be sold to a non-Korean company.

OOCL is listed on the Hong Kong stock exchange.  I don't know if there is a majority owner who could possibly block a sale.  According to published data they are making money.  If I were looking to buy a shipping company, this one has possibilities.

Yang Ming's stock is listed on the Taiwan Exchange.  According to Bloomberg, this company has negative earnings of around 1.00, with the stock trading around 8.00.   This company is leasing newbuilds (ships) from Seaspan, and I don't know how many of their fleet might be owned.  The fundamentals of this company look problematic.  They might be purchased cheaply, but if the industry continues in it's downward trend this company might not make it.

That's it for now.

Hamburg Süd name Carrier of the Year 2015 by DHL

PRESS RELEASE

17-Dec-2015

Press Information

Peter Frederiksen, Hamburg Süd (front row r.), was presented with the award by Dominique von Orelli, DHL Global Forwarding (front row l.).

On 9th December, DHL Global Forwarding presented Hamburg Süd with the ‘Carrier of the Year 2015’ award. DHL is one of the leading global logistics enterprises and, with this honour, is underscoring the outstanding working relationship with Hamburg Süd, which ranks among the ten largest container shipping companies worldwide.

“We are happy to award Hamburg Süd as the Ocean Carrier of the Year for outstanding customer service, schedule reliability and rate competitiveness. The company has proven to be a trustworthy partner and shown great commitment to supporting DHL Global Forwarding’s business needs over the last couple of years,” explains Dominique von Orelli, Head of FCL Product & Capacity Management, DHL Global Forwarding. “Hamburg Süd has improved its value proposition for us on many key trade lanes, such as Asia to Latin America or Asia to the US. This allows us to offer high-quality, increasingly competitive service to our customers globally.”

The award was received by Peter Frederiksen, Member of the Executive Board of Hamburg Süd, at the annual DHL Carrier Meeting in Bonn: “Hamburg Süd sees itself as a quality carrier. Our aim is to offer the best possible solution for every logistical challenge. The excellent collaboration with DHL is aspiration and motivation in equal measure. The award confirms our belief that, in an extremely competitive market, it is possible to score successes with customer orientation and operational excellence. And it reflects the strong commitment of the entire Hamburg Süd team globally.”

Basis for bunker charge as published by the TSA (Transpacific Stabilization Agreement)

This is the basis listed by the TSA for the bunker charge

TSA Fuel Price-Bunker Charge Conversion Table
	Average	Bunker Charge for Next Quarter (US$)
	Weighted Fuel Price	West Coast			East Coast/Gulf
	(US$/Ton) 800.01 - 820 780.01 - 800 760.01 - 780 740.01 - 760 720.01 - 740 700.01 - 720 680-01 - 700 660.01 - 680 640.01 - 660 620.01 - 640 600.01 - 620 580.01 - 600 560.01 - 580 540.01 - 560 520.01 - 540 500.01 - 520 480-01 - 500 460.01 - 480 440.01 - 460 420.01 - 440 400.01 - 420 380.01 - 400 360.01 - 380 340.01 - 360 320.01 - 340 300.01 - 320 280.01 - 300 260.01 - 280 240.01 - 260 220.01 - 240 200.01 - 220 180.01 - 200	20' 551 540 529 518 508 497 486 475 464 454 443 432 421 410 400 389 378 367 356 346 335 324 313 302 292 281 270 259 248 238 227 216	40' 612 600 588 576 564 552 540 528 516 504 492 480 468 456 444 432 420 408 396 384 372 360 348 336 324 312 300 288 276 264 252 240		20' 1077 1056 1034 1013 991 969 948 926 905 883 861 840 818 797 775 753 732 710 689 667 645 624 602 581 559 537 516 494 473 451 429 408	40' 1197 1173 1149 1125 1101 1077 1053 1029 1005 981 957 933 909 885 861 837 813 789 765 741 717 693 669 645 621 597 573 549 525 501 477 453

And this is what the TSA has stated is the recent costs for bunker fuel

Weekly Average Price Differentials 0.1% MGO Low-Sulfur vs. Standard Bunker Fuel
	Week Of: Nov 30 Dec 07 Dec 14 Dec 21 Dec 28 Jan 04 2016 Jan 11 Jan 18 Jan 25 Feb 01 Feb 08 Feb 15 Feb 22	USWC 271 261.5 253	USEC/Gulf 213 200.5 188
	Source: Bunkerworld Reminder: Figures denote difference in price; as example, “100” means that at the load port in question, low-sulfur fuel cost $100/MT more than standard bunker fuel.

I guess if the bunker prices drop below 180 they will have to update their chart.

click here for link to their site

Hapag Lloyd stock

Hapag Lloyd issued an IPO (initial public offering of stock) back in November.

From Bloomberg news (at the time of issue).  The stock ticker symbol is HLAG and trades on Xetra exchange.

Hapag-Lloyd shares were sold at 20 euros ($21.92) apiece, the German shipping company said on Tuesday, confirming an earlier Reuters report.
The company had originally targeted a market cap of more than 5 billion euros, but in wobbly markets offered shares for 23-29 euros each.
Weak demand later prompted it to postpone the IPO, trim the number of shares on offer and lower the price range to 20-22 euros.
Several large investors had cancelled share orders after a profit warning from peer Maersk rocked already jittery markets.

Read more at Reutershttp://www.reuters.com/article/hapag-lloyd-ipo-idUSL8N12Y3Q820151103#gVW9QRZjDioSPTrl.99

CMA CGM to buy NOL (operating as APL). Consolidation in the industry continues.

CMA CGM, the French shipping company, has offered to buy NOL,  (formerly Neptune Orient Line) which is a Singapore company, and operates under the name of APL (formerly American President Line).

This sale will probably be approved by the various governments.  It's doubtful China would protest, as they are getting ready to merge COSCO and China Shipping.

These mergers are the continuation of consolidation in the container shipping industry.  However, it is not yet enough to improve their fortunes.   All of the carriers continue to believe growth will come, when they need to be realizing profits will not come by growth, but by increased efficiencies by each company.

Because the "per slot cost" has been the indicator for lowest cost in the industry, everyone has concluded that bigger is better, because each slot would then cost less.   However, those nickles and dimes in the other parts of business add up, and those costs of have been ignored by the carriers for years.

The industry is sadly lacking in efficient computer systems.  They allow terminal operators to run and dictate the shore side part of the business.  The carriers are unwilling to take on the unions.   They have become "wholesalers" of cargo, giving the NVOCC/consolidators  cheap rates because the carriers have been too lazy to deal with the difficulties of handling small shipments.

Just as it has taken 40 years after deregulation for the airline industry to see consolidation and profits, it will likely take this many years for the container shipping industry.