Good News for Shippers and Importers, as Glut of New Capacity will Keep Ocean Carriage Rates Low for Some Time
The large number of ships ordered during better times – many of them of the megaship variety – are likely to continue to overwhelm the pretty strong global growth in container shipping demand for some time, industry analysts say, while noting big drop offs in transpacific volumes.
That’s good news for shippers and importers, but will risk real financial troubles for some of the carriers, which are barely breaking even on just operational costs on Asia to Europe routes now, and with only a slightly better landscape from Asia to the North America.
“An excess of capacity on key routes, as well as poor discipline from carriers, means that container shipping lines will not cover their cost of capital in 2011 and many will lose money once again,” said the analysts at Drewry Shipping Consultants, in summarizing its latest quarterly container forecast. “Our new global demand forecast remains fairly positive, at just over 7% growth for this year and despite concern in the western economies, we still see decent volumes in intra-Asia and on emerging trades with Latin America.” Read more here.
Date: November 4, 2011