Forwarders believe lines may have learned their lesson on capacity management
Ocean freight rates will remain stable in the first half of 2011 if shipping lines have learned the capacity management lessons of the last two years, according to leading forwarders.
Kaiying Chan, Senior VP for Ocean Freight, South Asia-Pacific at DHL Global Forwarding, told IFW the lines were now more efficient in their ability to manage capacity through peak and low seasons.
“There were no drastic rate decreases through 2010, like we have seen in the past,” he said.
“Market levels stabilised during the slack season and for weeks now shipping lines have been announcing peak season surcharges again on various trade lanes like the transpacific eastbound.
“Fleets are growing as per demand, and if demand is moderate in comparison to supply, shipping lines understand well enough how to balance that.”
Thomas Lieb, Chairman of DB Schenker, said he also expected rates to be stable in 2011.
“This stability will depend on the ability of the carriers to find the right balance between capacity and demand,” he added.
“On certain lanes, for example Asia-Europe, the increase in capacity will most likely exceed the growth of the volume. Thus, without any capacity management, the rates may get under pressure. And we see a similar development for the transpacific market.”
Chan said lines were now more adept at removing capacity from key trade lanes.
“It takes only three weeks to take out vessels and lay them up these days,” he said.
“So, it is likely that rates will be stable, and increase in Q1, considering traditional volume increases and contract renewals taking place at the time.”
However, Stuart Bowie, GAC Group Sales Director, said there remained a risk that lines could break ranks in pursuit of marketshare.
“We would hope to see greater stability in the market believing – perhaps optimistically – that shipping lines will have learned from experience,” he added.
Forwarders believe lines may have learned their lesson on capacity management
Ocean freight rates will remain stable in the first half of 2011 if shipping lines have learned the capacity management lessons of the last two years, according to leading forwarders.
Kaiying Chan, Senior VP for Ocean Freight, South Asia-Pacific at DHL Global Forwarding, told IFW the lines were now more efficient in their ability to manage capacity through peak and low seasons.
“There were no drastic rate decreases through 2010, like we have seen in the past,” he said.
“Market levels stabilised during the slack season and for weeks now shipping lines have been announcing peak season surcharges again on various trade lanes like the transpacific eastbound.
“Fleets are growing as per demand, and if demand is moderate in comparison to supply, shipping lines understand well enough how to balance that.”
Thomas Lieb, Chairman of DB Schenker, said he also expected rates to be stable in 2011.
“This stability will depend on the ability of the carriers to find the right balance between capacity and demand,” he added.
“On certain lanes, for example Asia-Europe, the increase in capacity will most likely exceed the growth of the volume. Thus, without any capacity management, the rates may get under pressure. And we see a similar development for the transpacific market.”
Chan said lines were now more adept at removing capacity from key trade lanes.
“It takes only three weeks to take out vessels and lay them up these days,” he said.
“So, it is likely that rates will be stable, and increase in Q1, considering traditional volume increases and contract renewals taking place at the time.”
However, Stuart Bowie, GAC Group Sales Director, said there remained a risk that lines could break ranks in pursuit of marketshare.
“We would hope to see greater stability in the market believing – perhaps optimistically – that shipping lines will have learned from experience,” he added.