AlixPartners: Carriers Start 2017 with Grim Outlook

Image Courtesy: MSC

As the container shipping industry continues to be plagued by the same challenges since the onset of the 2008 financial crisis, the outlook for global container carriers remains grim at the start of 2017, consulting firm AlixPartners said.

Sluggish demand levels are exacerbating supply-and-demand imbalances, while mega vessels continue to join the growing global fleet.

Additionally, events like Brexit and the new US administration’s policies threaten to add insult to injury as they inject even more uncertainty into the future of global trade.

Yet, according to AlixPartners, hope remains for the shipping industry as the fourth quarter of 2016 saw a surge in rate levels on major East-West trades.

Furthermore, Hanjin Shipping’s bankruptcy at the tail end of peak season helped create a rare seller’s market that lasted through the close of 2016.

“Although carriers will struggle to improve their financial performance this year, they can take clear steps to shore up balance sheets in this difficult environment,” the consulting firm said.

Carriers will face some hard decisions in 2017. As they have already taken steps to relieve their financial woes, including slashing CAPEX and OPEX and stepping up scrapping, the companies should continue to drive down costs through effective post-merger integration and fleet rationalization activities that can bring supply and demand back into balance.

Fortunately, spot rates have improved in the wake of the Hanjin bankruptcy, which carriers must maintain at the very least.

The carrier community’s ability to drive rate levels higher into the transpacific contract negotiations will likely decide whether 2017 will be the turning point the industry desperately needs—or just another bad year in a growing string of losses, AlixPartners said.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Apr 2017 >>
MTWTFSS
27 28 29 30 31 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30

THE 30TH WORLD PORTS CONFERENCE Enabling Trade Energizing The World

This event is expected to have more than 500 attendees from the field of port, logistics, shipping and maritime industry…

read more >

Singapore Maritime Week 2017

Singapore Maritime Week (SMW) is the leading maritime event in Singapore. Driven by the Maritime and Port Authority of Singapore (MPA), SMW…

read more >

Breakbulk Europe 2017

For more than a decade, Breakbulk Europe has served as the networking hub for industry professionals who do business in Europe — or would like to! Exhibitors and sponsors include cargo owners, ocean carriers, freight forwarders, ports/terminals, heavy haulers, equipment companies and more that are involved in this specialized industry.

In addition to exceptional networking opportunities, Breakbulk Europe provides a dynamic conference, along with a range of educational and training workshops — intensive all-day classes held the day before the exhibition opens as well as many on-the-floor sessions.

  • Over 7,600 participants attended Breakbulk Europe 2016
  • Meet with over 400 exhibitors and sponsors
  • Hear from industry experts, including leading shippers, during the conference sessions
  • Learn new skills in the educational workshops held before the exhibition and on-the-floor micro-seminars and exhibitor-led sessions during the event

More info

read more >

Smart Operations

Smart Operations events, from Fathom Maritime Intelligence, examines how to use intelligent shared integration, and connected operations…

read more >