Executive Briefings

Let's Not Be So Quick to Declare That Recovery Is Here, Says Shipping Analyst

Despite robust growth in volumes and rates for container lines, Drewry Shipping Consultants said Tuesday that a more clear picture of the recovery will emerge in the next six weeks, when a backlog of shipments out of Asia should be cleared.

"There are some potential derailers to this renaissance of which industry stakeholders should not lose sight, and we do not concur with the belief among some carriers that it is business as usual -- yet," said Neil Dekker, editor of Drewry Container Forecaster.

"There is still a huge backlog of shipments in the system which is not new demand and once this is moved out of Asia in the next six weeks or so, we believe that the true strength of the summer peak season will be somewhat less than many predict. There is every possibility that utilization factors will decline, which in turn will have a knock-on effect on freight rates. By no means do we see a precipitous fall, but there will be an impact." 

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Despite robust growth in volumes and rates for container lines, Drewry Shipping Consultants said Tuesday that a more clear picture of the recovery will emerge in the next six weeks, when a backlog of shipments out of Asia should be cleared.

"There are some potential derailers to this renaissance of which industry stakeholders should not lose sight, and we do not concur with the belief among some carriers that it is business as usual -- yet," said Neil Dekker, editor of Drewry Container Forecaster.

"There is still a huge backlog of shipments in the system which is not new demand and once this is moved out of Asia in the next six weeks or so, we believe that the true strength of the summer peak season will be somewhat less than many predict. There is every possibility that utilization factors will decline, which in turn will have a knock-on effect on freight rates. By no means do we see a precipitous fall, but there will be an impact." 

Read Full Article