Executive Briefings

Container Shipping Market Uncertain For 2017, Analysts Say

Although rates have risen from the historic lows of early 2016, uncertainty for the global container shipping market in 2017 will be uncertain, according to Xeneta, a company that provides market intelligence platform for containerized ocean freight.

Next year should give "battered shipowners" some reprieve, but structural problems continue to undermine stability, the firm says. The reason for this forecast is that "macroeconomic and political factors are casting long shadows on the horizon."

Reviewing 2016, the firm notes that it was a tumultuous year for carriers — defined by low rates, overcapacity and the subsequent collapse of Hanjin. However, the final months of the year saw generally higher short-term rates, with the market average price for 40-foot containers on the world’s top trade route — Far East Asia to North American main ports — climbing from a low of $1,164 in April to $1,716 by the close of 2016.

The same rates on the No. 2 route — Far East Asia to North Europe — climbed from lows of $791 to $1,878 the end of the year.

“Prices rose from Q3 into Q4 before flattening out a little,” said Xeneta CEO Patrik Berglund, “but the carriers’ positions improved significantly from the dire situation they found themselves in early 2016. That said, it had to.”

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Next year should give "battered shipowners" some reprieve, but structural problems continue to undermine stability, the firm says. The reason for this forecast is that "macroeconomic and political factors are casting long shadows on the horizon."

Reviewing 2016, the firm notes that it was a tumultuous year for carriers — defined by low rates, overcapacity and the subsequent collapse of Hanjin. However, the final months of the year saw generally higher short-term rates, with the market average price for 40-foot containers on the world’s top trade route — Far East Asia to North American main ports — climbing from a low of $1,164 in April to $1,716 by the close of 2016.

The same rates on the No. 2 route — Far East Asia to North Europe — climbed from lows of $791 to $1,878 the end of the year.

“Prices rose from Q3 into Q4 before flattening out a little,” said Xeneta CEO Patrik Berglund, “but the carriers’ positions improved significantly from the dire situation they found themselves in early 2016. That said, it had to.”

Read Full Article