THE rapid expansion of container shipping capacity this year threatens to reverse the strong profitability ocean carriers showed in the first quarter, according to Drewry Shipping Consultants.
Carriers suffered low rates in the first quarter yet delivered the best profits of recent times. This success was achieved on the back of lower unit costs that offset sinking rates.
The maritime research house expects carriers will add at least 100,000 TEU by the end of June and more than that in each month to the end of the year even as freight rates decline, reports New York's Marine Link.
Drewry calculates that average unit revenues were down six per cent year on year, but this was more than covered by an 11 per cent fall in unit costs.
The first quarter 2015 the most profitable for the container industry in four years. Unlike previous quarters when only a handful - Maersk Line and CMA CGM - made real money, this time 10 of the sample carriers were in the black.
From June onwards there will be a minimum of 100,000 TEU a month joining the world containership fleet with July seeing twice that amount.
In total, there are 35 ships of 10,000 TEU or more that will need to find a home in the east-west trades by the year's end.
After two months of the second quarter the World Container Index is averaging 28 per cent lower than it was for the first quarter, whereas IFO (intermediate fuel oil) 380 in Rotterdam has increased by 15 per cent.
Source : HKSG.