Drewry webinar on container shipping market outlook
CLECAT has joined the webinar organised by container shipping consultancy and analyst Drewry to explore some of the key findings from its the latest Container Forecaster Report. The presentation provided an update on the container shipping market outlook and gave guidance on freight rates and carrier profitability.
While container lines have done relatively well financially during the COVID-19 pandemic, cargo owners and forwarders have faced greatly inflated transport costs and lower service quality, with many shippers and forwarders reporting cargo roll-overs and carriers prioritising higher-paying spot cargo, according to Drewry. The firm said that container shipping lines’ positive financial performance risks them appearing to be profiteering from the crisis and may lead to carrier-shipper animosity.
Drewry indicated that it did not believe lines have been profiteering but that they needed to do more to develop a better shipper-carrier dialogue.
The Drewry noted that, “despite a sudden fall off in demand for their services, lines look set this year to make more money than they have in a long time as their crisis-management tactics – essentially blanking voyages – has paid off handsomely. In our latest Container Forecaster report, Drewry estimates that the industry secured an operating profit (EBIT) of around $1.4 billion and margin of 3.2% in 1Q20, pretty much on par with the same quarter of last year.”
Drewry specified that, while the first quarter was not a full test of the industry’s COVID-19 coping mechanism as most countries did not enter lockdown until quite late in the period, “all signs point to operating carriers having not only survived the market shock, but even benefitting from it, with spot market rates soaring and a number of previously guarded companies now upgrading quarterly and full-year guidance”.
Drewry will organise another webinar on 11 August for shippers and forwarders. Drewry surveys of shippers and carrier schedules have shown that shippers have been subject to a high incidence of container roll-overs since March (up to 20%) and have had to manage sudden carrier changes in capacity, services and “cancelled sailings” on a much higher scale than before.
In this webinar, Drewry’s Philip Damas and Stijn Rubens will review the operational problems, the recent service quality findings, the impact on shippers and the importance of measuring carrier performance against agreed Key Performance Indicators. You can register here to register to attend the webinar.