SeaIntel: Carrier Consolidation Pushes Volatility Up?

ContainershipImage Courtesy: Port of Rotterdam

Volatility levels continued rising in the recent years driven by an increase in consolidation witnessed in the container shipping industry, according to SeaIntel Maritime Analysis.

After taking a closer look at market volatility out of Asia over the past 20 years, SeaIntel informed that there was a correlation between higher consolidation and higher volatility.

SeaIntel’s analysis showed that during the full 20-year period the level of rate volatility in Q1 tripled, while it doubled in Q2 and Q4. Only Q3 has not seen a marked change in volatility.

Whereas market volatility is in essence unchanged in the peak season, it has been going up sharply off-peak.

Although the correlation is irrefutable, the reasons for such a rise are not clear. However, SeaIntel said that the most probable hypothesis for this development is that in the path towards consolidation, it becomes increasingly important for the main carriers to maintain and grow their market share – and as the markets become more commoditized, freight rates become the most important tool with which to accomplish this objective – in turn driving volatility upwards.

“Consolidation is indeed seen as necessary in order to stabilize the markets – but the path leading to a critical mass of consolidation has the counter-intuitive effect of actually destabilizing the markets,” Alan Murphy, SeaIntel CEO, said.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Jul 2018 >>
MTWTFSS
25 26 27 28 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 3 4 5

TRANSTEC 2018

TRANSTEC 2018 welcomes participants to explore Russian Ports and Shipping development opportunities…

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 >

SMM 2018

This is a must-attend event – a unique opportunity to meet key players, display business strengths, establish new contacts and exchange…

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 >