[230710.EN.SEA] The Inefficiencies Of Container Shipping Examined

LAST week in The Container Shipping Manager we looked at the inefficiency of box moves in the industry, and found that the average box generated revenue every 70-80 days.
The conclusion was that this level of productivity is very inefficient.

Today we will take our analysis a little further and look at the ratio between three crucial parameters in the sector—container supply, vessel supply and trade volumes, and see how efficient, or inefficient the industry currently is.

In conducting this analysis we will look at the container to vessel space ratio, which will reveal the availability of containers to support each vessel slot. The container to trade volume ration will show how business one box can generate, based on the level of customer demand in a given year.

Finally the vessel to trade volume will look at the productivity of vessel space.

In the above graph we can see the trade to vessel ratio scenario from 2002 to the forecast for 2011.

From 2002 to 2007 we see that for every TEU slot available, each slot handled between 12 and 13 TEU in trade demand, with the highest level of productivity occurring in 2004 where for every twenty-foot slot, 13.1 TEU in demand was handled.

Since 2008, however, we see that the level of efficiency has dropped significantly, courtesy of the global financial crisis. Productivity dropped to 9.5 TEU for every available twenty-foot slot.

Despite a recovery this year and continued trade growth projected for next year as well, there is little evidence to suggest that the level of productivity is improving, with productivity projected at 9.52 and 9.62 for 2010 and 2011, respectively.

Source : CSM, 19.07.10.