Weakening demand and excess supply are continuing to plague the shipping industry on the back of a slump in freight rates, according to CNBC.
Søren Skou, CEO of Maersk Line, said: “The continued lack of demand and over-capacity resulted in sharply declining rates from the second quarter and onwards.
“We expect the container shipping market to grow a bit more in 2016, but it will still be a challenging year. Not least as over-capacity and a large order book, sufficient for many years of growth, plague the industry.”
Phillip Damas, Director of Drewry, said: “Rate reductions are spreading across all routes, as the shipping market continues to soften.
“This is good news for shippers' cost budgets, as the latest average index value of $701 per 40ft represents an expense of less than 10 cents per kilometre and makes products competitive even in remote markets.”
Drewry’s recent analysis showed that the World Container Index, which provides independent container market data, had fallen to a record low of US$701 per 40ft container.
A saturated market continues to be a problem for liners which have multiple large ships on order for delivery in 2016-2017.