Tuesday, February 21, 2017 | ISSN 0719-241X

The future golden era of container shipping

Cargo Shipping Outlook 2021 report predicts container cargo on the rise
Edition of July 29, 2016

Hope lies in the future, or so it seems. Cargo shipping trade is about to see a surge in activity and by 2021 the maritime container transport industry should be recovered from the 8-year slump it’s been under, according to the Xeneta Cargo Shipping Market - Global Trends and Forecast to 2021 report.

The document states that after fiscal year 2018 the cargo shipping market is projected to reach 12.52 billion tons, with the container market the most promising. The sudden growth in container transport would come as a result of globalization and the demographic changes that boost infrastructure development and retail consumption. This would revitalize the global supply & demand cycle and have a positive impact on container transport.

The expanded Panama Canal, opened in June 2016, would be another catalyst for cargo transport, as trade between the Pacific and Atlantic ports is expected to increase. Also, developing countries are producing more, on their way to becoming exporting nations. This, of course, all adds to more cargo. The report states that Asia-Pacific and the high number of developing countries in that area is the largest market for cargo shipping trade. A rise in spot market rates, especially in the Asia-North Europe route is another positive indicator for a surge in cargo transport.

Not all that glitters is gold

Albeit the auspicious future outlook the report depicts, there are certain factors that can affect container transport and ultimately prices. It may still be too early to evaluate, but the Brexit and the Panama Canal expansion could both have a negative effect on global trade and freight rates.

Shipping alliances and their role in the quest for balance between overcapacity/low demand will prove detrimental to the recovery of the industry. Cheap steel continues to be a temptation for shipowners who want to cease the opportunity to stock-up on large vessels at a low price, fueling on the vicious cycle that caused the downfall of container shipping in the first place. Also, the social and political turmoil developing nations go through in their process of becoming developed may make for a volatile scenario at some point in the next five years, especially in the Asian region where cargo is strongest at the moment.

There are too many variables in question right now to draw conclusions as to what the perfect formula should be to make the predictions on the report come true. If all conditions stay as they are right now the proposed reality might occurr, but any fluctuation too steep could throw the whole equation off balance and eliminate hope for the much needed better future in container shipping.

By MundoMaritimo

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