Market murmurs point to upward pressure on Far East rates

… but local commentator expresses scepticism
ALAN PEAT
THERE ARE reports on the Internet which reveal that fears have been expressed in European shipping circles that cargo demand on the Far East trade could exceed available capacity this year. The result, they added, could be upward pressure on freight rates throughout the world. This is a complete turnaround from the thought that has eaten up press space for the past year – that, with so many of the “super container ships” being deployed on the main trades between the Far East and the US, and Far East-Europe, overcapacity could be the result. A local shipping line executive, however, suggested that it might well be more an expression of hope for rate increments during the year ahead than a firm expectation of capacity shortage. “It has to happen first,” he told FTW, “and I wouldn’t pay any attention to such a statement until then.” But, he added, the booming market in China is certainly going to continue to boost trade both in-and-out of that country – and it’s big enough to have a global impact. Also, if market demand does exceed vessel capacity supply, the lines would definitely put in rate increments – and these, our source added, would be pretty heavy increases. “This,” he said, “because the lines would want to capitalise on the situation, and, at the same time, try to slow down the market demand.”