Are ocean carriers in a “boom and bust” cycle?
October 11, 2011
While the biggest ocean carriers seek the economies of scale from ever-larger super post-Panamax ships, they run the risk but of introducing too much capacity at the same time, thereby ruining the already fragile supply/demand balance.
This observation, made by Drewry’s latest quarterly Container Forecaster, also suggests that the “boom and bust cycle” is now an annual occurrence, rather than something that happens every 4-5 years.
Neil Dekker, a chief analyst with Drewry, noted that three factors will determine how the industry will develop in the next 5-10 years.
Number one, he said, will be carrier behavior and commercial strategies. In other words, will they learn from their mistakes? Number two, will be the continued investment in ever larger container vessels. And finally, how will they respond if consumer confidence continues to erode, and “near sourcing” takes share away from global deployments?
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