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April 05, 2018

Drewry predicts moderate growth for container shipping

According to the latest edition of the Container Forecaster published by global shipping consultancy Drewry, the outlook for the container shipping market in 2018 and 2019 is a combination of healthy demand growth that will outpace the fleet expansion, resulting in a better supply-demand balance and slightly higher freight rates and profits for carriers.

"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.

Drewry says subtle changes to the new vessel 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 Ultra Large Container Vessels (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."

Source: Drewry