After rock bottom rates in 2016, rate levels are maintaining their recovery through 2017.
Container shipping is fast becoming a carriers’ market and with the extra pricing power gained by industry consolidation, alliances and better supply-demand fundamentals, the stage is set for continued rate recovery.
Maritime analyst Drewry said headhaul trades that were most important to carrier revenues were staging a broad recovery from the rock-bottom rate levels of last year and that this was likely to continue for the balance of 2017.
Carriers have been able to secure higher trans-Pacific service contracts for the 2017–18 season, with prices around $1,200 per FEU to the West Coast, compared with about $800 to $900 per FEU in the prior season.
“Due to the higher 2016 second-half rates the comparisons will get tougher as the year goes on, which will put an end to the very high year-over-year increases, but even if they plateau or start decreasing in the fourth-quarter 2017 they will still be higher than in 2016 as a whole,” Drewry said in its Container Insight Weekly.
“This year is one of huge correction after a disastrous 2016 for rates, buoyed at the same time by better supply and demand fundamentals,” the analyst said. “While there is still some ground to be made up to get above pre-2015 levels there is no doubt that the pendulum is swinging quite fast towards a carriers’ market.”