BIMCO, the world’s largest international shipping association, has said fleet growth was key to holding the container shipping industry back in 2018 and that it is likely to take centre stage once again in 2019.
In its ‘Reflections 2019 – Market Analysis’, BIMCO describes 2018 as “a disappointment”, largely due to the development of fleet growth.
It says demolition interest plummeted to a 10-year low in 2018, which in turn caused fleet growth to rise far higher than demand.
Consequently, the continued inflow of very large container ships onto the Far East to Europe trade land meant cascading was once again a defining factor in the market place.
BIMCO believes the outlook for fleet growth in 2019 is generally positive but that it is vulnerable should freight rates increase – even slightly.
How are ports coping in a new manufacturing landscape? Find out with a Port Technology technical paper
Another critical factor will be the resolution of the US-China trade war and the effect it will have on volume.
In its report, BIMCO said this: “Looking ahead to 2019, fleet growth takes centre stage when it comes to market fundamentals. If only judged by new-builds, it’s clearly positive, but remember, 700,000 TEU are idle in today’s market.
“If the lion’s share of that is reactivated – which it will be as soon freight rates just go up slightly – expectations may be reversed. Our hopes for a rise in demand are muted by the ongoing trade war and the GDP growth of the advanced economies.”
Read more:
