After losses of over US$6 billion in 2011 and an “appalling” first quarter this year, the container shipping industry could cut its losses to US$1.3 billion or even make as much as $1.8 billion in profit in 2012, depending on how costs, particularly that of fuel, develop, a research and consultancy specialist said.
The outlook should provide a decent platform for 2013, when demand will improve slightly, Drewry Shipping Consultants said in its latest “Container Forecaster” report.
Carriers have recently restored rates to profitable levels in the core east-west trade lanes, putting most operations above break-even.
The turnaround has been largely due to the industry’s determination to raise rates, which have more than tripled on the Asia-Europe trade since March, the London-based consultancy said.
“If spot rates hold for the rest of the year, carriers will be in a strong position for the re-negotiation of shipper contracts in 2013,” it added.
Forecasting 4.3 percent global container growth this year, Drewry said it is crucial for carriers to manage capacity in the second half of 2012 to back up their drive to raise rates back to profitable levels.
But it does not see a strong peak season for 2012 due to the worsening situation in Europe, and expects some rate erosion during the summer months.
Evergreen Line’s decision to launch another weekly loop this month is not a positive move, and the Asia-Europe trade is most at risk because of the need to fill more ships of capacities exceeding 12,000 standard containers every week, Drewry said.
“Since we do not see significant demand growth in the headhaul east-west trades next year, the industry must refrain from ordering new ships in the next 18 months to enable a return to a more normal supply-demand balance in the medium term.”
Photo: Martin Pettitt
