Overcapacity, weak demand keeping freight rates low

[LONDON] Global container-shipping operators' efforts to boost freight rates this year are failing to bring results because of overcapacity and weak demand.

That may undermine the recent rise in container-shipping stocks after second- quarter industry results were better than expected, says Robin Byde, an analyst at Cantor Fitzgerald Europe in London. The industry's traditional peak season in Q3 probably will disappoint, he added.

The world's biggest container lines - including AP Moeller-Maersk A/S, CMA CGM SA and Mediterranean Shipping Co - have been trying to push up freight charges after fees between Asia and Europe fell to an 18-month low in June. Maersk, the largest, announced four increases in five months. A proposed multi-carrier pooling alliance, a spate of mergers and a move to mothball older ships are all failing to bring the industry back into balance amid subdued demand and a glut of new ships.