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One Year After Container Shipping’s Worst-Ever Crisis

August 21, 2017 12:05 am Published by

One year after excess capacity caused the $500 billion global container shipping industry’s worst-ever crisis, a massive consolidation is underway and the survivors are enjoying big economies of scale and increased demand. As a result, shipping rates are climbing, and an index tracking cargo rates on major routes from Asia is approximately 22 percent higher than it was in 2016.

Container shipping is now a game only for big boys with deep pockets.- Chief Executive Officer, Crucial Perspective

The growing use of ultra-large container ships is key to the industry's turnaround. Companies who operate them are able to deploy fewer vessels and move more cargo on a single journey to benefit from higher rates. There are currently 58 gigantic carriers worldwide that can transport more than 18,000 containers, and the number is expected to double in two years.

The rising market concentration will give container shipping liners greater pricing and bargaining power over manufacturers and retailers like Wal-Mart Stores Inc. and Target Corp. According to Alphaliner, the five biggest container lines control approximately 60 percent of the global market.

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