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October 26, 2018

Car carrier shipping continues to recover despite rising uncertainty

According to the Finished Vehicle Shipping Annual Review and Forecast 2018/19 report published by global shipping consultancy Drewry, car carrier shipping is expected to continue its recovery from the trough of 2016, supported by improving utilisation.

Seaborne trade in finished vehicles has recovered strongly from the 2016 low, recording growth approaching 6% in 2017 to 37.5 million ceu.

But Drewry says increasing manufacturing localisation and the threat of trade wars will slow finished vehicle cargo growth, while carrier operational efficiency will be challenged by the emergence of new trades and ports of call.

"Despite improving utilisation and a record low orderbook, owners and operators are holding off acquiring capacity, whether through ordering, sales and purchase or chartered in tonnage, as trade uncertainty weighs on the market," said Tom Ossieur, Head of Car Carriers at Drewry.

The recent recovery in finished vehicle trade is being challenged by the threat of higher auto trade tariffs, increasing localisation of production as well as a shift in car sales growth from mature to more volatile emerging markets.

Source: Drewry