European shipping consultancy Alphaliner has warned that continuing economic uncertainty in OECD countries and the US might mean that container shipping is heading toward a prolonged slump that could last longer than the 2009 downturn.
‘In the absence of a strong rebound of the Western economies, trade growth is expected to remain behind fleet growth for quite some time’, the consultancy said. ‘The main carriers’ operating margins have slipped this year and the poor operating conditions experienced these days could well last for two more years, given the prevailing oversupply situation’.
Alphaliner noted that liner companies were in the red in 2009 due to the recession, but that the current slump is caused by over-capacity and weak demand growth in OECD countries.
It noted that the lull in container ship orders between first quarter 2008 and first quarter 2010 brought the order book down from 60 per cent to 26 per cent of the existing fleet, but did not solve the overcapacity problem. When the liner companies recouped their losses in 2010, they went on an ordering spree in the belief that the sector was on the road to recovery. ‘The 2.3 million TEU of capacity contracted since June 2010 pushed the orderbook back to 4.5 million TEU, or 30 per cent of the existing fleet,’ Alphaliner reported. ‘Some industry sources continue to underestimate the impact of the excess supply problem, citing misleading supply growth figures of seven per cent for 2011 and 2012 and a capacity shortage in 2013’.