Drewry: Gradual Recovery Expected in Container Shipping

Despite continuing concerns of weak trade growth and fleet oversupply in the container shipping market, a gradual market recovery is now expected, according to shipping consultancy Drewry.

Worse than expected second quarter financial results will be followed by a better second half-year. But Drewry still expects container carriers to record a collective operating loss of USD 5 billion this year.

“We forecast industry profitability to recover next year, thanks to improving freight rates and slightly higher cargo volumes, and so record a modest operating profit of USD 2.5 billion in 2017,” Drewry said.

While average freight rates are expected to improve next year, this will follow several years of negative returns and will still leave pricing well below the average for 2015, according to the shipping consultancy.

A key unknown remains carrier commercial behaviour which has proven unpredictable and counterintuitive. Fuel prices are also on the increase and carriers are extremely wary of costs.

Drewry said that this may support higher freight rates via the bunker surcharge mechanism, but it also increases operational costs.

“The fact that the orderbook is at a virtual standstill is a major positive as is rapidly increased scrapping. But even so, the next two years will still be very challenging on the supply side with annual fleet growth of between 5% and 6% and many more ultra large container vessels (ULCVs) to be delivered,” Drewry said.

Drewry estimates that revenue for 2016 may reach USD 143 billion, but this compares to USD 218 billion back in 2012.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Sep 2018 >>
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

CWC World LNG & Gas Series: 10th Asia Pacific Summit

Bringing together the key LNG buyers and sellers from across the globe, the Summit provides…

read more >

Europort 2018

From 15-17 May 2018, the 12th edition of Europort Romania willl take place in the IDU Hall in Constanta…

read more >

Defence Safety Conference Supported by The Defence Safety Authority, UK MoD

The Defence Safety Conference is the first of its kind exclusively dedicated to safety across the defence domain…

read more >

Singapore International Bunkering Conference and Exhibition (SIBCON)

The 20th edition of the Singapore International Bunkering Conference and Exhibition (SIBCON) will be about inspiring change…

read more >