BIMCO's (Baltic and International Maritime Council) top analyst Peter Sand expects container shipping to see a net fleet growth of 4.1 per cent which leaves little room for fundamental market balance improvements.
'As a result, increased earnings must come from continued cost-cutting and permanent slow-steaming to keep fuel costs on a tight leash,?said Mr Sand.
Other economies of scale can be wrung from piling on more boxes or lengthening vessels to boost capacity in headhaul trades, he said.
'The next challenge is to understand that this is as good as it gets, and to avoid wishful thinking that demand levels will increase significantly - as that will not happen,' he said.
China aims to remain the world's top exporter of containerised goods too, he said, adding that there is a lot of competition in that field, and that maritime supply chains will not change much in coming years.
'For container shipping, the improvement in 2017 will carry on into 2018, where fleet growth rate seems to match demand growth, and as a result no big freight rate changes are expected to lift earnings,' Mr Sands said.
BIMCO expected 2017 to be a better than 2016. Freight rates went up and volatility went down, he said. Demolitions also declined and much of the idle fleet was reactivated.
'The 2017 demand growth rate is heading for five per cent plus, the highest in six years. After a terrible 2015, port throughput has gone up and up, growing as much as 7.7 per cent (quarter-on-quarter) in Q3-2017.
'As demand rebounded, combined with a multi-year low fleet growth rate in 2016, the fundamental market balance improved. In 2017 we have not seen such an improvement.
'The fundamental balance seems almost unchanged, as reactivation of idled ships lifted actual fleet growth beyond the nominal TEU growth rate of 3.3 per cent,' Mr Sands said.
In September, the ordering drought came to an end. Twenty new orders for 22,000 TEU ships broke a 21-month lull in newbuild activity, he said.
'Profitability is up for grabs across the container shipping industry, if demand growth remains in the region of 4-5 per cent and actual fleet growth is handled with care.'
WORLD SHIPPING
05 January 2018 - 19:00
Update: 05 January 2018 - 23:00
BIMCO forecasts good year ahead, but warns this is as good as it gets
BIMCO's (Baltic and International Maritime Council) top analyst Peter Sand expects container shipping to see a net fleet growth of 4
WORLD SHIPPING
05 January 2018 - 19:00
Update: 05 January 2018 - 23:00
This news 2824 hits received.
EDITOR
SEANEWS TURKEY MARITIME NEWS FROM THE WORLD AND TURKEY
These news may also interest you