Also see report in the JOC
A toxic mixture of overcapacity, weak demand and aggressive commercial pricing is threatening liner shipping industry profitability for the rest of 2015, according to global shipping consultancy Drewry. The report is published in multiple news sources, includingvLinkedin.
Drewry’s forecast that container shipping carriers might record profits of up to USD 8 billion in 2015, has been revised. The consultancy believes that they should be lucky to break even this year with some lines expected to return to red by the end of 2015.
Drewry estimates that this year average global freight rates will decline at their fastest pace since 2011, when the fall in industry unit revenue was as great as 10%.
It points out that second quarter spot rates in the four main East-West head haul trades have been falling by 32% year-on-year.
Neil Dekker, Drewry’s director of container shipping research said: “There are not enough good homes for ships of over 8,000 teu where they can be placed without doing some damage to the supply/demand balance.”
The orderbook is starting to get out of control, with another 1.14 million teu added since January. … investment pans backfire as ” virtually all major head haul trades are plagued by overcapacity”.