Cargo Business Newswire

Tuesday, November 3, 2015

Drewry: Industry faces 3 more years of overcapacity and fiscal struggle

Slowing global trade and an overfull orderbook of large vessel capacity mean that container shipping is poised for another three years of overcapacity and financial pain, according to the Container Market Annual Review and Forecast 2015/16 from Drewry Maritime Research.

The recent slowdown in global trade has caused Drewry to halve its forecast for container shipping growth for 2015 to just 2.2 percent and decrease estimates for future years. Meanwhile, an additional 1.6 million TEUs of new capacity is being added to the fleet this year, equating to a growth rate of 7.7 percent. Consequently, Drewry’s Global Supply/Demand Index, which measures the relative balance of vessel capacity and cargo demand in the

market where 100 equals equilibrium, has fallen to a reading of 91 in 2015, its lowest since the recession-ravaged year of 2009.

"The container shipping industry is in the midst of an over-capacity crisis which will worsen next year," said Neil Dekker, Drewry’s director of container shipping research. "How carriers and tramp owners address the overcapacity situation will influence the duration of the crisis. Shipping lines will need to idle a much larger portion of the fleet than they have hitherto been prepared to do. Otherwise, short of an unexpected recovery in traffic volumes, container shipping is set for several years of overcapacity and mounting financial losses."