Shipping industry continues to sail into headwinds

The global container shipping industry continues to struggle financially, and there is no clear end in sight, predicts the AlixPartners 2015 Container Shipping Outlook report published in March. The industry will continue to “face significant headwinds in terms of supply-anddemand imbalances” for years to come, with the recent decline in fuel prices providing only a temporary shelter, the report predicts. “Traces of improvements are evident, but they are not significant, and the industry as a whole has yet to demonstrate the ability to sustain them,” it says. Shipping lines are supporting the bottom line through stricter control of costs, which means that the “the race to add larger and larger vessels may be coming to an end. “Carriers looking to change their fortunes should focus on the container shipping business by continuing to divest of noncore assets and by closely scrutinising the profitability of the markets they serve, the routes they sail, and the customers they conduct business with,” the report adds. AlixPartners’ calculations, based on the published annual reports of most of the 15 top container carriers, have identified a drop in revenue on average over the past two years. Industry revenue remains more than 16% below its 2008 peak of more than $200 billion. Against this backdrop, carriers are reducing both operating expenses and capital expenditures (capex). Operating expenses decreased by 4% – or $7.6 billion – from 2013 to 2014 and by more than $15 billion since 2012. INSERT 16% The percentage that industry revenue has dropped since its 2008 peak.