|
In its latest issue of Container Forecaster, Drewry says expected container shipping liner losses throughout the first half of 2016, worsened by the low prevailing spot and contract freight rates, will lead to a major trigger point at some stage later this year.
The researchers believe this will happen through radical capacity management at the trade route level and a much more logical approach to commercial pricing.
Global rate levels are no longer sustainable and with the carriers' GRI mechanism soon to be outmoded on European trades because of new EU regulations, carriers will need to find new tools.
Drewry estimates that global freight rates will deteriorate further this year while at the same time carriers will no longer be able to reduce costs at the same pace, since the main advantages of lower fuel prices will have already been realized.
Right now, Drewry says ocean carriers continue to cling to the belief that the lower slot costs of the 14,000-TEU and 18,000-TEU ships will bring them success. But Drewry says the hoped for economies of scale are much reduced after vessels of this size are deployed.
Having focused on the cost side for so long, the maritime analysts say it is vital that carriers turn themselves to the revenue side of the equation if shippers are to have a sustainable container industry.
|
Sixty-six void sailings in February in the major East-West trades did nothing to raise freight rates. A global idle fleet that hit one million TEUs by March also seemed to do little.
While global handling growth is forecast to reach an estimated 2.1 percent in 2016 and this is by no means back in 2009 negative territory, the industry could get very ugly by the second half of this year if current commercial trends continue. Drewry believes a trigger point will be reached when more radical action on the capacity front will have to take place.
"This inflection point will only deliver any kind of market stability if carriers start to use their in-house rate profitability models and offer commercially sustainable freight rates," said Neil Dekker, Drewry's director of container research. "Ocean carriers should be looking at revenue per TEU rather than industry load factors. In a world where overcapacity is a given on every trade, head haul load factors of, for example, 85 percent need not be considered a disaster by any means. With 2.6 million TEUs of new capacity to be delivered by the end of 2017, this kind of load factor and potentially even lower is the new reality, so get used to it."
|
