Analysts Drewry Shipping Consultants are forecasting that freight rates for containerships will show a rise of around 16% by the end of this year.
Speaking at a seminar hosted by the Institute of Chartered Shipbrokers as part of London International Shipping Week, Drewry director and head of research products Martin Dixon said that taken across all trade routes this represents “quite a significant change.”
Dixon said the increase in freight rates is expected to continue in 2018 but at a more gradual pace.
“We think the industry is moving into an era now where there is light at end of the tunnel and prospects are much better than they have been,” he said.
The research director acknowledged that there has been a slight fall-off in rates in the last few weeks, attributing this to the closure of some Chinese manufacturers which had refused to comply with environmental regulations and a loss of some backhauls of recycling products.
But he said the rate set back is likely to be temporary and will right itself.
He highlighted that once the consolidation underway among the major container lines is completed by the middle of next year, the six major owner groupings will control around 65% of global boxship capacity.
He said this represents a big change in the pricing power which they will have in the industry.
Dixon warned that despite a slow-down in newbuilding orders, over-capacity in the containership fleet is not going to disappear with some 2.7m teu of tonnage still on order and two major carriers currently looking at contracting new tonnage.
But he said ordering may remain capped due to the lack of available ship finance and rising terminal costs, which are eroding returns for the large ships.
