🕒 Article read time: 2 minutes
Shipping review reveals shippers’ struggle as carriers’ profits soar
Importers and exporters are facing a rapidly disintegrating container shipping market as capacity fails to keep pace with business demand and shipping rates rise, according to the Global Shippers’ Forum (GSF), the business organisation representing the owners of cargo in international trade.
MARGINAL INCREASE IN CONTAINER SHIPS
The findings from the latest Container Shipping Market Review compiled by MDS Transmodal and GSF show a slight increase in the number of ships deployed, which allowed higher numbers of containers to be moved in Q2 following a lull in the first quarter of 2021.
“Global levels of container traffic grew again in Q2 2021 to reach record levels but have still not yet quite recovered to the level that trends implied three years ago, when lines reduced their level of new buildings,” said Mike Garratt, Chairman of MDS Transmodal, “Capacity shares based on vessel sharing agreements (or consortia) in some key markets now exceed 40%. This high level of consolidation has the benefit of enabling lines to adjust capacity allocation in line with changing demand but, combined with the resulting very high levels of utilisation, have allowed freight rates to remain at historically unprecedented levels and imply that some potential freight may be being suppressed. Performance indicators, including skipped ports, continue to compare poorly with pre-pandemic levels.”
James Hookham, Director of the Global Shippers’ Forum, said: “Importers and exporters are facing a meltdown of the container shipping market, with rates in the stratosphere, slots up for auction and service performance in the trash. The prospects for the coming peak season look grim.”
CONSISTENT PICTURE OF RISING RATES AND DECLINING SERVICE
Q2 reflects the Ever Given’s closure of the Suez Canal, which impacted on schedules and port calls in Europe, North Africa and North America. But according to GSF the effects are barely discernible in a globally consistent picture of rising rates, declining service and ships sailing at close to their maximum capacity.
“What none of the industry metrics show are the huge numbers of shipments that are NOT being moved – the boxes left on the quay, stacked in the terminal or stockpiled in expert warehouses awaiting a slot,” Hookham continued, “Getting these goods to market will be the difference between economic recovery and empty shelves and consumer price inflation.
“Also at stake is the solvency of thousands of SMEs banking on the coming peak season to help get them through the COVID crisis. Governments need to look closer and harder at a shipping market that is out of control.”
*www.globalshippersforum.com
Published On: 09/09/2021 16:00:14
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