Lower slot costs to drive profitability
Despite record vessel deliveries, container shipping profitability is expected to improve in 2015, driven by lower unit costs, according to the latest edition of the Container Forecaster, published by shipping consultancy Drewry.
This year, the global fleet is projected to grow by 7.2%, a faster pace than demand which is forecast to expand at a more modest 5.3%. However, despite these headwinds, Drewry forecasts that industry unit costs will continue to decline more rapidly than the average freight rates, so raising profitability.
Bunker costs fell by 50% year-on-year in Q4/2014 and anecdotal evidence suggests that carriers intend to increase annual contract rates on all trades with their key beneficial cargo owner clients this year. Drewry estimates that the industry will finish 2014 in the black, thanks mainly to the contributions of a handful of lines such as Maersk and CMA CGM, while others will have lost money.
More carriers are expected to be profitable in 2015.