Drewry warns box sector still fragile
Container shipping is not yet out of danger, despite the recent surge in cargo volumes and rebound in freight rates that has lifted the gloom from an industry that accumulated unprecedented financial losses in 2009.
That is the message from Drewry Shipping Consultants which has added its voice to those urging caution at this stage of the fledgling recovery.
?Until we see consistent month-on-month improvements on the main trades into this year"s peak season period, we cannot seriously suggest the current global recession is over and that the container trades can heave a sigh of relief,? the firm says in its latest Drewry Container Forecaster, published today.
With the liner trades having avoided the widely-anticipated failure of a major carrier, and trade conditions looking much better, ?many believe this year will see a return to better times and profitability,? Drewry notes.
?But it is still early days; a large number of post-panamax vessels are due for delivery this year and most of the all-important transpacific rate contracts have still to be signed.?
Drewry"s prognosis that the ?patient is not off the at-risk list yet? tallies with observations from other industry sources that it is far to soon to say that container shipping is heading back towards good times. Maersk Line has been particularly outspoken in warning that the big year-on-year increases in cargo volumes seen in the early weeks of 2010 are not sustainable, with growth rates likely to slow in the coming months.
Drewry Container Forecaster editor Neil Dekker says: ?This year will be a very tough one for the carriers to balance capacity against forecast demand, and should too much tonnage be brought back in or too quickly, it is possible that the freight rate improvements, giving carriers much needed cash injections, could be derailed to some extent.?
Assuming lines exercise restraint in reactivating idle capacity, shippers should expect to pay considerably more to move c argo under their 2010-11 eastbound transpacific contracts that are currently bneing renewed, while rates have already gone up sharply in the Asia to Europe trades.
Including fuel surcharges, average freight rates globally are expected to be about a third higher this year than last. But overshadowing the container shipping busiess will be the continued spectre of supply and demand imbalance.
?It should not be forgotten that while annual fleet growth last year turned out to be only 5%, approximately 500,000 teu that was not delivered will be operational in 2010,? Mr Dekker adds.
?Global recovery is still at an embryonic stage, and this is why we believe the industry needs to be cautious.?