The container supply-and-demand balance stood at 7 percent at the end of 2015, and could grow to between 8.2 percent and 13.8 percent in 2020, the Boston Consulting Group said.
The Boston Consulting Group (BCG) said that oversupply of containership capacity could worsen in coming years.
In a report titled Sailing in Strong Winds, BCG said the container supply-and-demand balance stood at 7 percent at the end of 2015, and that its proprietary model indicates that gap could grow to between 8.2 percent and 13.8 percent in 2020, with oversupply of vessel capacity reaching between 2 million to 3.3 million TEUs.
Global growth in container shipping trade was just 1.9 percent in 2015, down from 3.3 percent in 2014.
“For the first time in history, growth in container demand lagged behind global gross domestic product, producing a GDP multiplier lower than 1,” BCG said. “To succeed in this increasingly difficult industry, container
liners will need to craft more sophisticated strategies for boosting
their performance.
“Companies that haven’t excelled at being scale leaders or niche players appear to be stuck in the middle – a dangerous position in an ever-more commoditized and consolidating industry.” It suggests such companies need to use mergers and acquisitions to drive down costs and also to “unlock greater synergies from their alliances.”
Looking at the transpacific trade, which accounts for 60 percent of U.S. imports, BCG said imports grew at 8 percent in 2015.
“We question whether this momentum can endure,” BCG said, noting how the economic rebound in the U.S. is “unevenly distributed, with the lion’s share of increased disposable income going to higher-income consumers.”
BCG said, “According to the American Economic Association, as their wealth expands, affluent families spend more on education and domestic services than on consumer goods.”
Lower income families are salting away pay increases, baby boomers are aging, and millennials are opting to spend more on experiences than goods, BCG noted.
BCG: Oversupply of containership capacity could worsen
