Too Many Big Ships May Mean Excess Capacity

Authoritative Drewry Shipping Consultants says that too much emphasis is being placed by the liner shipping industry on the current strength of European-Far East trade lanes. As a result, the global marine consultant firm is seeing a great number of new orders for larger ships.

In its eighth Annual Container Market Review and Forecast 2007/08, Drewry’s supply/demand Index for 2009 anticipates a “weakening of the core trades.” Further, the report cautions the industry to be aware that economic factors may further undermine the balance in 2010, when the first of the newly ordered 10,000 TEU (twenty foot equivalent unit) ships are slated to move into the European-Far East trade.

Neil Dekker, Editor of the Drewrey report, notes, “The industry should remain concerned that the transpacific and transatlantic trades are not performing well. Current weaknesses in the US economy serve as a warning that double-digit demand growth in the transpacific trade is not permanent. Ocean carriers need to remain wary of their costs and the management of the cascading of big ships from the main east/west trades to the smaller north/south trades.”

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