Overcapacity lingers in shipping outlook

December 6 - The outlook for global shipping in 2018 remains negative, as lingering overcapacity continues to restrict material improvement in market fundamentals, says Fitch Ratings.

According to the ratings agency, container shipping freight rates have increased this year, but overcapacity makes this recovery fragile and previous rate increases have proved short lived.

In its Fitch 2018 Outlook: Global Shipping, the company explained that any improvement in market sentiment tends to stimulate new orders, and this happened again when new orders, including mega-ships, surged in the third quarter of 2017.

"We expect supply growth to be over 5.5 percent in 2018, outpacing a likely 4.5 percent increase in container transport volume growth," said Fitch Ratings. "A sustainable recovery in rates will need continuous and consistent capacity discipline in the industry. This could be driven by consolidation in the sector over the medium term."

The recent recovery in dry bulk shipping rates may also prove short lived, although, unlike for the other segments, Fitch Ratings expects demand to outstrip the growth in vessel supply during 2018.

The market balance could be helped by the low level of new vessel orders seen over the last three years. China will remain the key driver for dry bulk commodities imports and trade. The sector is therefore particularly sensitive to Chinese GDP growth, which Fitch Ratings expects to be 6.4 percent in 2018.

 

www.fitchratings.com

Heavy Lift | News

Valleyfield secures funding

August 14 - The port of Valleyfield in Canada has received a CAD3.5 million (USD2.67 million) grant from the Québec government to support its marine transportation infrastructure investments.
Views: 151

DeLuca steps up at Duluth

August 14 - The Duluth Seaway Port Authority (DPSA) in the USA has appointed Deb DeLuca as executive director, effective August 16.
Views: 147

Ace arrival at Vancouver USA

August 10 - The port of Vancouver USA has welcomed Mitsui OSK Line’s (MOL) ro-ro vessel Orca Ace on its maiden voyage.
Views: 426

Bristol Port recognised for nuclear power logistics role

August 10 - The UK Government’s Department for Business, Energy and Industrial Strategy, and power generation company EDF Energy, have recognised Bristol Port for its role in the logistics supply chain for EDF’s Hinckley Point C nuclear power plant.
Views: 424

Heavy Lift Across The World

Discover heavy lift and project logistics industry news from around the world by region.