Container future uncertain

The balance between the supply of ships and demand for space has become more and more unstable since 2009, according to a specialist shipping analyst.  They expect this volatility to remain in force for about the next four years.

There are a number of reasons for this: firstly, shipping lines are taking time to adjust to the changing trade distances.  Production has moved further away from supply, which means that the excess in capacity has been taken up by the ships being en route for longer.

Other reasons are overcapacity on certain routes, resulting in battles for market share, vessels being laid up in an attempt to boost freight rates, sudden inventory corrections, and the possibility of slow steaming coming to an end. If shipping lines order vessels based on the volumes of the last 30 years, it is highly likely that there will be over capacity, resulting in another tumble in freight rates. Inventory correction has the opposite effect, pushing freight rates up suddenly.

So it seems that prospects are still unpredictable.