"The container shipping industry is in the midst of an over-capacity crisis which will worsen next year," Neil Dekker, director of container shipping research at Drewry said in a note accompanying the release of its 2015 edition of the Container Market Annual Review and Forecast 2015/16.
Drewry says it has now slashed its container shipping growth forecast for 2015 to just 2.2 percent, while the 1.6 million TEU of extra capacity that has been added this year is the equivalent of a growth rate of 7.7 percent.
As a result, the firm says its Global Supply/Demand Index indicating the relative balance of vessel capacity and cargo demand in the market (where 100 equals equilibrium) has fallen to a reading of 91 in 2015, its lowest level since 2009.
Global container throughput grew by only 1.6% during the second quarter of 2015, reflecting the general downturn in sentiment and weaker manufacturing production in China.
Drewry’s analysis of the latest data suggests that the current weakness in manufacturing production and in some consumption markets, particularly Europe
and Latin America
, will lead to some of the lowest demand growth for 2015 and 2016 experienced for a number of years, with the exception of the 2009 crash.
As of July 2015 the global cellular fleet stood at 5,157 vessels with total capacity of 19.0 million teu. Although the capacity of the fleet increased by about one million teu in the preceding 12 months, the overall number of vessels reduced, emphasising the continued trend towards bigger ships.
With regards to the supply-demand balance, carriers continue to deploy their largest assets in the core East-West trade lanes. However the major fall-out continues to be the effect of cascading tonnage into the key North – South trades.
The current weak demand in many of these trades means that freight rates have suffered badly and carriers are losing money. At the moment, the biggest issue for lines is to get the deployment balance correct and the report provides further details of how the lines are doing this through missed sailings and service re-structuring.