AlixPartners: Carriers Start 2017 with Grim Outlook

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>

<< May 2019 >>
MTWTFSS
29 30 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 31 1 2

GreenTech in Shipping USA Forum 2019

GreenTech in Shipping USA Forum is an event for Maritime leaders who want to unlock successful business formula of the industry!

read more >

CWC World Gas & Power Series – Brazil & the Americas Summit

CWC World Gas & Power Series: Brazil & the Americas Summit is the perfect meeting place to make contacts…

read more >

FPSO Brazil Congress 2019

Charging ahead with 24 planned orders by 2022, Brazil has once again solidified its status as one of the world’s foremost oil and gas leaders…

read more >

Nor-Shipping 2019

Nor-Shipping’s conference and event programme is tailored to deliver the knowledge, value and networking to help you build your business.

read more >