Carrier consolidation cure and cause of rate volatility: SeaIntel
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Carrier consolidation cure and cause of rate volatility: SeaIntel

CARRIER consolidation is necessary to stabilise markets, says SeaIntel CEO Alan Murphy, 'but the path leading to a critical mass of consolidation has the counter-intuitive effect of actually destabilising the market'

26 April 2018 - 19:06 - Update: 26 April 2018 - 23:55

CARRIER consolidation is necessary to stabilise markets, says SeaIntel CEO Alan Murphy, 'but the path leading to a critical mass of consolidation has the counter-intuitive effect of actually destabilising the market'.

'The most probable hypothesis is that on the path towards consolidation, it becomes important for carriers to maintain and grow market share. As the markets become more commoditised, freight rates become the most important tool to accomplish this - in turn driving volatility upwards,' he said in his weekly newsletter Sunday Spotlight.

'It is evident that there is positive correlation between consolidation and market volatility - but also that the slope is completely opposite of what might be intuitively expected,' he said.

'Whereas market volatility is unchanged in the peak season, it has been going up sharply off-peak, and especially the developments in Q1 around Chinese New Year has become much more volatile.'
 

Source: WORLD SHIPPING
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