Despite fears to the contrary, all major ocean carriers survived the global economic downturn by cutting capacity through layups and slow steaming, according to the Shipping Gazette citing this year’s Drewry's Annual Market Review & Forecast 2010-11.
Sixteen of the world's biggest carriers will return to profitability this year making an estimated US$5 billion (NZD$6.61 billion).
The report said however that these carriers cannot expect to enjoy 2010 revenue improvements next year. The fear now is that a breaking of ranks among carriers could destroy the good discipline that has spared them disaster in what many regard as the worse downturn since the Great Depression.
"Any larger carrier breaking ranks could push the fragility of recovery to breaking point," Neil Dekker, editor of the report was quoted saying. "Carriers will react decisively by taking capacity out of the system and will not return tonnage in 2011 until demand has shown the required upturn."
The report added that the maintenance of the positive supply and demand equilibrium next year is dependent on the continuation of this disciplined approach. Carriers, he said, have been able to improve freight rates and their profitability by managing capacity at the individual route level. Layups could be a feature if there was overcapacity, he said.
The Drewry report also noted that shippers and carriers no longer have a straight rate deal. "A combination of slow steaming, fewer weekly strings and increasing vessel-sharing agreements means that the traditional carrier-shipper partnership has changed forever.
"Shippers and carriers need to think much more creatively and need to work together to provide much needed security in the supply chain. The relationship between the two parties must be repaired and carriers must now look to properly differentiate themselves once again from their competitors." -- Source: Shipping Gazette