21-10-2016

Box shipping’s best hope is that things don’t get worse: Drewry

Drewry

CONTAINER shipping's best hope this year and next is for things to stay as bad as they are and not get worse, says Drewry's Container Forecaster and Review.

The latest Drewry Maritime Research report estimates that revenue for 2016 may reach US$143 billion, but this compares to $218 billion back in 2012.

Worse than expected second quarter financial results will be followed by a better second half-year, it said. 

But Drewry still expects container carriers to record a collective operating loss of $5 billion this year.

Said Drewry's top box analyst Neil Dekker: "Hanjin's failure is the culmination of several years of poor commercial decisions and mismanagement, not just by Hanjin, but the industry as a whole." 

But this, he said, will not signal a major tipping point. "It was more a side-show as freight rates had crucially already turned a corner at the mid-year point," he said. 

"More consolidation is likely, but is not necessarily the route to the Promised Land. Senior company executives talk about synergy savings of hundreds of millions of dollars, but this means nothing when it is all too easily given away in weak contract negotiations and the desire to maintain precious market share," he said. 

Mr Dekker said the answer lies with fully addressing the revenue side of the equation. 

"Thankfully there are signs that the spot market is being addressed to some degree. The acid test for 2017 will be how the lines approach BCO contract negotiations," he said.

The report also released port operator throughput standings. Hong Kong's Hutchinson Ports with 81 million TEU topped the list, ahead of Maersk's APM Terminals with 69.3 million TEU and Singapore's PSA International with 53.1 million TEU.

Source: Schednet

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