Tuesday, 5 May 2009

Too many ships on box trades


The global container fleet overcapacity that contributed to last year’s dramatic decline in ocean freight rates is set to continue, despite predictions of a revival in trade growth next year.
Paul Bingham, MD of IHS Global Insight’s global commerce and transportation group, believed volumes would start to improve by the end of the year and reach a growth rate of 5% during 2010, driven by increased consumption, inventory restocking and improved credit availability.
And, IHS figures estimate, annual growth between 2009 and 2013, will average around 4%.
However, figures from Lloyd’s Register Fairplay show that the global container fleet will grow by around 9% a year - despite ship scrapping.
"There is no question that oversupply of vessels on a sustained basis will help suppress the rates shippers will have to pay," said Bingham.
He added that low rates would also support trade growth and continued globalisation, which had been questioned because of the high cost of fuel, increasing protectionism - fuelled by recession - and lack of trade finance.
"In fact [low rates] will also contribute to the resistance of the global economy to any sort of reversed globalisation impacts from factors such as the fuel price spikes we saw last summer, " said Bingham.
"We think [low rates] will act as a boost to facilitate and support the return to growth of trade in the world, but is not significant enough on its own."

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