Describing the situation in the ocean container industry, Drewry Shipping Consultants make ample use of the analogy of rearranging the deck chairs on the Titanic. “If we think of that grand liner as the market–proud, overconfident and heading towards a catastrophe partly of its own making–then we can see the operators desperately rearranging their fleets, while refusing to acknowledge the necessity of abandoning ship–or ships–before the crisis becomes a disaster,” says Drewry.
While the past six months have seen a huge amount of capacity changes in the industry, says Drewry, freight rates continue to plummet while the industry shirks the painful decisions that are needed to ensure their collective survival. The indictment of the maritime operators' strategy comes in a special report “Capacity Management” which Drewry has released.
Thus far, carriers have used service suspensions, slow teaming, service deviations and lay ups to adjust capacity, says Drewry. The response is not comensurate with the need, according to the analysis. Those who act the fastest and are the most radical in their strategies will be “best placed for recovery in the long term,” concludes Drewry.
Drastic action includes scrapping and sholesale cancellation of orders for containerships, suggests Drewry. “We still expect some major operators to fail this year,” the maritime consultant adds.