Container shipping lines are expected to post weak second quarter results during the next month, as carriers remain burdened by soft volume and excess capacity, shipping analysts warn.
“With freight rates down on all major trade lanes in 2Q13 and volume growth stuttering, we expect the best performing players in the liner segment to be flat at best,” Credit Suisse said in a research report on the Asia-Pacific shipping sector.
Introduction of more-efficient large ships and declining bunker prices “will provide some offset to a poor revenue environment, but not enough to cushion against a soggy top line,” Credit Suisse said.
Jefferies LLC said a 13 percent average drop in bunker prices during the second quarter was the sole positive trend for container lines.
Carriers are unlikely to see a near-time jump in volume that would sustain rates, Jefferies said in a weekly transportation sector note. High inventory levels in the U.S. and Europe will dampen restocking and weaken container shipments, the firm warned.
Longer-term trends point to slower growth rates for container shipping, Jefferies said. “The long-term trend of container volume growth is slowing, in our view; container volume could grow slower than global GDP as in-sourcing and near-sourcing pick up pace.”