Drewry sees “sustained profitability” for container carriers

Drewry sees “sustained profitability” for container carriers

Drewry sees “sustained profitability” for container carriers

   Container shipping lines will enjoy high vessel load factors and improved profitability in the next few years, Drewry Shipping Consultants said in a report.

   The report, “Annual Container Market Review and Forecast 2003/04,” is published as several container shipping companies have returned to profitability and expressed optimism about their prospects for this and next year.

   Drewry predicts that the liner shipping industry “is about to enter a period of sustainable growth.”

   It predicts a growth of world container cargo moves of 12.3 percent this year and 9.7 percent in 2004, exceeding the expected rise of container vessel supply of 10.3 percent this year and 8.9 percent next year.

   Vessel utilization levels are forecast to remain high over the next two years. “This should enable further rate restoration programs to be implemented, with carriers, potentially at least, entering a period of sustained profitability,” it said.

   For 2005, Drewry also expects cargo traffic to rise faster (by 10.4 percent) than vessel supply (8.5 percent).

   Containers in the trades from Asia “are being carried at significantly higher freight rates than last year,” Drewry said. The report projects total gross revenue of $106 billion for carriers in 2003, up more than 19 percent on last year.

   However, Drewry cautioned that widening box imbalances in the transpacific, Europe/Far East/Europe and transatlantic trades have increased carriers’ operating costs considerably. The shipment of empty containers    into Australia and the East Coast South America has also grown sharply, it noted.

   Drewry estimated that over 21 percent of container moves worldwide are for empty boxes.