It's not business as usual quite yet
Shipping analyst warns peak season may not be boom time
The peak season may not be as strong as some expect, meaning vessel utilisation and rates may weaken, according to consultant Drewry’s latest report.
Drewry’s Container Forecaster report says the dark days of 2009 are “well behind us” and expects global demand growth of 8.5%.
However, it warns that the strong volumes currently being reported may be the result of a backlog, which could result in demand weakening as the peak season progresses.
Neil Dekker, Editor of Drewry’s Container Forecaster, said: “There are some potential de-railers to this renaissance, of which industry stakeholders should not lose sight, and we do not concur with the belief among some carriers that it is business as usual – yet.
“There is still a huge backlog of shipments in the system, which is not new demand, and once this is moved out of Asia over the next six weeks or so, we believe the true strength of the summer peak season will be somewhat less than many predict.
“There is every possibility that utilisation factors will decline, which, in turn, will have a knock-on effect on freight rates. By no means do we see a precipitous fall, but there will be an impact.”
The backlog of shipments was being exacerbated by the container shortage, he added.
Ocean carriers brought back 19% of capacity to the eastbound transpacific trade in the second quarter and 12.4% on the Asia-Europe trade, with a forecasted 8% returning during quarter three.
But Drewry expects demand growth to weaken as the year develops and, given the economic uncertainty in Europe, there is a possibility that the overall market will be negatively affected.
Drewry’s Container Forecaster report says the dark days of 2009 are “well behind us” and expects global demand growth of 8.5%.
However, it warns that the strong volumes currently being reported may be the result of a backlog, which could result in demand weakening as the peak season progresses.
Neil Dekker, Editor of Drewry’s Container Forecaster, said: “There are some potential de-railers to this renaissance, of which industry stakeholders should not lose sight, and we do not concur with the belief among some carriers that it is business as usual – yet.
“There is still a huge backlog of shipments in the system, which is not new demand, and once this is moved out of Asia over the next six weeks or so, we believe the true strength of the summer peak season will be somewhat less than many predict.
“There is every possibility that utilisation factors will decline, which, in turn, will have a knock-on effect on freight rates. By no means do we see a precipitous fall, but there will be an impact.”
The backlog of shipments was being exacerbated by the container shortage, he added.
Ocean carriers brought back 19% of capacity to the eastbound transpacific trade in the second quarter and 12.4% on the Asia-Europe trade, with a forecasted 8% returning during quarter three.
But Drewry expects demand growth to weaken as the year develops and, given the economic uncertainty in Europe, there is a possibility that the overall market will be negatively affected.
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