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>

<< Jun 2019 >>
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 Smart Ship Exchange

The Exchange will look at the issues involved with increasing autonomy in shipping with an introduction to the concept…

read more >

Electric & Hybrid Marine World Expo Conference 2019

Electric & Hybrid Marine World Expo Conference is the world’s only international conference…

read more >

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 >

Global Sustainable Shipping Forum 2019

The event will provide valuable insights from conference sessions, great networking opportunities and will offer…

read more >