Container lines could earn nearly $5 billion this year, but only if demand meets projections and carriers continue to trim costs and restrain capacity growth, Drewry Maritime Research said in its latest Container Forecaster report.
Carrier profits in 2012 are estimated at $1.5 billion for 2012, mainly because of strong second and third quarters, but not all carriers finished the year in the black, the report noted.
Overcapacity remains a drag on rates. Carriers have struggled to maintain large general rate increases last March that brought revenue back above break-even levels for most lines.
A weak peak season last summer and fall didn’t help, and carriers have compounded their problems by reluctance to pull excess ships from service, the Drewry report noted.
“Carriers’ obvious reluctance to pull capacity in the core trades since October suggests that many still have an eye on market share,” said Neil Dekker, Drewry’s head of container research.
“Carriers seem to want to have it both ways,” he said. “The core trades are undergoing a major upgrading process with over forty 10,000-TEU vessels delivered in 2012, but at the same time (carriers) are refusing to lay up or idle significant tonnage.”
Drewry said its analysis of six east-west services suspended since October showed that only eight vessels were temporarily idled, and most of the others were simply transferred to other service strings.
Carriers have sought to reduce capacity by skipping sailings, but Dekker said this tactic “will only lead to severe volatility in the spot market” as carriers fail to achieve sustainable increases and are forced to use GRIs to stem further rate erosion instead to raise rates.
Drewry forecasts global demand will rise by 4.6 percent this year but that capacity on some trades will increase by a higher percentage. Average headhaul load factors remained at 75 to 85 percent during most of the second half of 2012.
Load factors from Asia to North Europe and the Mediterranean have risen recently, aided by the usual pre-Chinese New Year spike in cargo, but Drewry questioned whether carriers can maintain rate levels past mid-February, when volumes traditionally weaken.