The ailing container shipping market, which recently witnessed the bankruptcy of Hanjin Shipping, is not expected to stage a sustainable recovery until at least 2018, according to DNV GL.

Jan-Olaf Probst, director business development – executive vice president, at DNV GL-Maritime, told a DNV GL-organised seminar at SMM 2016 in Hamburg on Wednesday that the problem of oversupply in the boxship market is far from over, pointing to a less than optimistic outlook for the rest of this year and 2017.

“We are looking at at least 2018 for a recovery. The market will continue to consolidate and the forming of new alliances is a sign of that,” Probst told Seatrade Maritime News.

On the supply side, 311 new ships hit the waters between 2010 to 2015, contributing around 5.7m teu of capacity or 18,000 teu capacity per ship.

“The oversupply in the market is more like the owners having bigger vessels but not necessarily higher number of ships,” he observed. The capacity glut has inevitably led to lay up of idle tonnage, with 7% of global fleet based on capacity laid up since the start of 2016, or 6.7% laid up based on the number of vessels.

Container shipping trade volumes have not yet caught up with the influx of available transportation space, according to Probst, as a 4% rise in demand for 2016 is considered a little too optimistic, compared to just a 2% increase seen in 2015.

“The freight index is only going toward one direction which is down. The industry needs to continue to consolidate,” he said, adding that tighter operational coorperation would help lines cope with low earnings and manage costs.

Source:seatrade-maritime.com