Drewry: Container trade balance unlikely till 2015

Global container shipping capacity is increasing at twice the rate of demand, according to a Drewry director. This indicates that equilibrium between supply and demand in the major east-west trade lanes will not be reached until 2015 at the earliest. The result of this excess capacity is revealed in fact that spot container rates from Asia to Europe measured by the Shanghai Containerized Freight Index (SCFI) fell more than US$100 per 20-foot-equivalent unit during the week ending September 13. Rates have been decreasing for the past six weeks in these lanes, with the past two weeks showing decreases of roughly US$100 per week. “The phrase ‘shock and awe’ comes to mind when looking at the SCFI Asia-Europe results over the last two weeks, with both weeks seeing a very significant amount of value eroded and presently nothing to stop rates falling further in sight,” Benjamin Gibson, freight derivatives broker at Clarksons Securities told the Journal of Commerce (JOC). “Entering the 'off-season', this has got to be an indicator of very bad news for fourth quarter earnings.”