Container shipping traffic is one of the best barometers out there when it comes to the global economy.
Thus it’s encouraging that Drewry’s latest October outlook forecasts container shipping rates for major East-West trades will rise 18%.
Global container trade volume should recover slightly in the second half of 2009, and then more so through 2010.
Drewry: It is expected that there will be some minor recovery in trade flows for 2010 (+2.4%), but together with another hefty dose of capacity injection (+7.9%), the supply/demand balance will not just remain awful, but actually deteriorate further. While freight rates have been improving of late, this is of course counter-cyclical and it will be a huge test of carriers’ resolve and ability to maintain this momentum while at the same time continuing to effectively manage the supply side of the equation.
Drewry is projecting that average all-in east-west rates will climb rather encouragingly by 18% next year, but this has to be put in context against the enormous decline in 2009 (27%) and the fact that this does not even put rates back up to the same levels as 2006.
These potentially higher rates will still be low historically, and container shipping companies remain in hot water due to oversupply.
Yet for the rest of us, this outlook supports the global recovery argument, and is positive.