outlook for the container shipping market in 2018 and 2019 is a combination of
healthy demand growth that will outpace the fleet; resulting in a better
supply-demand balance and slightly higher freight rates and profits for
carriers, according to the latest edition of the Container Forecaster published
by global shipping consultancy Drewry.
“The bad news for carriers is that they are unlikely
to see the very strong demand growth rates of early 2017 for the foreseeable
future. The good news is that while port handling growth may have peaked, they
can still expect more than adequate volumes for at least the next two years,”
said Simon Heaney, senior manager, container research at Drewry and editor of
the Container Forecaster.
The latest edition of Container Forecaster includes
Drewry’s forecasts for world and regional container port handling, the
containership fleet and how those will combine to affect freight rates and
carrier profitability through 2019.
Subtle changes to the orderbook, mainly in the form of
delivery deferrals, have softened this year’s new capacity burden and had a
positive effect on Drewry’s supply-demand equations for both 2018 and 2019.
“The top-heavy delivery schedule for 2018 with the
majority of ULCVs being delivered in the first quarter has depressed our
supply-demand index, but the balance will improve as the year progresses,” said
Heaney. “Unfortunately for carriers this won’t come soon enough to erase the
negative sentiment for annual contracts, hence why we only anticipate a small
uplift in average freight rates for the year.”
Heaney added that renewed newbuild contracting
activity is not yet at the level that risks worsening the supply-demand
balance. “For now, we are optimistic that new investment in containerships will
be appropriate to the demand needs,” he said.
Drewry’s forecasts were finalised before the
escalation in trade hostility between the US and China. “We did build in some
element of trade deflation based on past rhetoric and actions,” said
“A trade war is not yet inevitable, but given the lack
of details, quantifying the risk to container shipping is very difficult. For
example, much of the hi-tech goods considered liable to tariffs will be
airfreighted rather than move on the water. In a worse-case scenario we believe
as much as 1% of the world’s loaded container traffic could be exposed, and
were the situation to become real we would clearly have to revise our demand
forecasts downwards,” he added.