Survey Reveals Global Ocean Shipping Volume Uncertainty - Global Trade Magazine
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  July 1st, 2016 | Written by

Survey Reveals Global Ocean Shipping Volume Uncertainty

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  • 85 percent of shippers expect same or declining volumes for the third quarter of 2016 as compared to last year.
  • The G6 Alliance, Cosco, and the Ocean Three Alliance are among those that have suspended or terminated services.
  • The peak season usually allows carriers to plan capacity deployments and to successfully demand rate increases.

Shippers appear to be expecting a peak shipping season this year that is anticlimactic. According to a survey released by Drewry Maritime Research, a whopping 85 percent of shippers expect straight-line or declining volumes for the third quarter of 2016 as compared to last year.

Only 18 percent predicted higher volumes for the traditional busy period for container shipping.

The survey confirms that international trade remains sluggish and delivers bad news to ocean carriers, who are looking for some sign that volumes—and rates—will pick up in an unprofitable year.

Terminal operators can’t be thrilled by these numbers either, especially in light of a recent OECD report that showed capacity outpacing demand.

Carriers have been busy removing capacity in some trades in an effort to support freight rates. That means that their demand forecasts are probably corroborating what the shippers in the Drewry survey are saying.

The G6 Alliance, Cosco, and the Ocean Three Alliance are among those that have suspended or terminated services out of Asia this year.

The traditional peak season, when retailers stock up for Christmas shopping, has always been a boon to carriers. It allows them to plan their capacity deployments and to successfully demand rate increases.

Last year’s third quarter didn’t come through for carriers and, at lease according to the Drewry survey, 2016 will provide a repeat performance.

One Drewry respondent said: “We don’t expect any peak whatsoever given the capacity in the market and an overall subdued global economy.” Some shippers, but not many, also said they moved goods earlier in the year to take advantage of low freight rates.

With all the capacity cutbacks, over three-quarters of shippers said that they are not concerned about securing space in the peak season.

That data point, among others led Drewry to conclude that “there will be no demand push to bolster carrier sales in the peak season.” Further capacity adjustments by the carriers can be expected.

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