Major Trade Lanes to Grow by 5.5 Pct in 2015

Growth across major trade lanes is expected to reach 5.5% in 2015, according to Drewry’s Outlook for Container Shipping Webinar presentation held on Thursday.

Drewry’s data estimate that average rates will decline by 3-4% globally next year, stressing the need for operators to cut costs.

The freight rate drop is attributed to new sulphur fuel regulations that will post a challenge to all industry stakeholders, Drewry explained.

Speaking of the impact of the lower fuel cost Drewry said that the price of fuel is very volatile and even though recent IFO prices have fallen by 20%, they could potentially increase again.

The lines have been gearing their global services towards slower transit for more than five years now and shippers have adapted their supply chains accordingly. Carriers have even been ordering ships in line with slow steaming ie 11 big ships for Asia-North Europe.

“Hence, it is unlikely carriers will essentially abandon slow steaming although on an individual basis it is possible some lines or alliances may choose to operate one premier fast service if for example they have four or more loops on a trade such as in the transpacific,” according to Drewry.

Annual volume growth in the next five years is forecast to range 5-6%, however this will not be uniform across all regions.

Drewry said that ULCV deliveries in 2015/2016 are expected to cause deployment issues, especially in the North-South trades via the cascade.

“We have seen evidence of this particularly in the trades to and from ECSA recently where spot rates have crashed in a very short period of time when supply has increased. We see this volatility continuing especially if the demand side of the equation disappoints, ” Drewry added.

A recovery is expected in 2017, which could be reached by adoption to change and reducing costs rather than achievening real balance between supply and demand.

Drewry believes that the new operating alliances are a positive development for the industry, but could bring temporary chaos to scheduling.

World Maritime News Staff; Image: WSC

 

 

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One thought on “Major Trade Lanes to Grow by 5.5 Pct in 2015”

  1. I agree with Drewy said that the industry must look more closely at the cost impact of the low-sulphur regulation, so that carriers and shippers can negotiate and manage the cost increases in good time.

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