Drewry predicts strong market until end of 2005
Drewry Shipping Consultants said in a report that demand for container shipping services will exceed slot supply this year and in 2005. A three-year run of tight market conditions in global container shipping could end.
The consultants latest report, “Annual Container Market Review and Forecast 2004-05,” predicts that effective worldwide ship capacity will increase 9.2 percent this year, 11.2 percent in 2005 and 12.8 percent in 2006. Forecast demand measured in net cargo moves would expand over the same period by 12.1 percent this year (2.9 percent faster than supply), 12.6 percent in 2005 (1.4 percent faster than supply) and 9.8 percent in 2006 (3 percent slower than supply).
Drewry said 2004 will be “a banner year for the industry,” with 2005 also looking strong for carriers.
This year, two-way traffic volumes are projected to rise 13.8 percent on the transpacific route and 16.5 percent on the Europe/Far East/Europe route, Drewry said.
The consultant estimates carriers’ average revenue per TEU, having jumped 17 percent in 2003 to about $1,348, will increase 6 percent this year to $1,434. Unit revenue will increase again 2 percent in 2005 to $1,467 per TEU, before decreasing 4 percent to $1,402 in 2006, it predicted.
Commenting on the record vessel orderbook of about 47 percent of the present containership fleet, Drewry said nearly 1.2 million TEU of additional capacity is scheduled for delivery in 2006.
“Although this will lead to an easing in market conditions, barring a collapse in demand, Drewry expects a soft rather than a crash landing for the industry,” the consultant said.