Freight Rates For Container Shipping To Slide In 2016

Freight rates for container shipping are expected to plunge deeper in 2016 as the supply-demand imbalance continues widening resulting in more losses for boxship owners, according to shipping consultancy, Drewry.

Many stakeholders point to the fact that bunker prices of for example $140 per tonne in Rotterdam are clearly contributing to lower overall container freight rates, but Drewry believes that a new and worrying trend has become apparent for ocean carriers.

“Our most recent data suggests that carriers are no longer able to cut costs faster than the prevailing declines seen in the freight rate market.

Drewry is of the opinion that oil prices have probably hit the market bottom right now and costs for the positioning of empty containers and vessel lay ups will increase this year. Our latest calculation is that a 10,000 TEUs (containers) vessel would incur a minimum of $450,000 in reactivation costs if laid up in Asia for three months or more.

It should also not be forgotten that many lines no longer even quote a BAF on some trade lanes,” Drewry said.