Container shipping is in a bad place

Drewry estimates that this year average global freight rates will fall at their fastest pace since 2011 and expects some lines to be back in the red by the end of 2015

Published Tue, Jul 21, 2015 · 09:50 PM

Strait Talk

A TOXIC mixture of overcapacity, weak demand and aggressive commercial pricing threatens liner shipping industry profitability for the rest of 2015. That is the warning published in the latest Container Forecaster report from global shipping consultant Drewry.

Coincidentally a press report last week claimed that Singapore-based container shipping group Neptune Orient Lines is for sale. Whether NOL is to be sold or not, time will tell. What is absolutely clear is that liner shipping in general is in a bad place.

Earlier this year, Drewry forecast that container shipping carriers would collectively generate profits of up to US$8 billion in 2015, but its revised view is that they will be lucky to break even this year. This, Drewry says, means that some lines will be back in the red by the end of 2015.

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