‘Worst not over for container shipping’

Container shipping companies’ operating margins are forecast to worsen further in the fourth quarter, with the majority of them expected to turn in negative results, according to Alphaliner.

The decreasing of margins follows the downward trend from the third quarter of 2015 which saw weak cargo volumes and slumping freight rates that pushed carriers’ earning down.

“Although seven out of the 14 main carriers that have reported their quarterly financial results still showed positive operating margins, the average has dropped to –1.8% in the third quarter. This compares with average margins of 5.2% and 2.4% in the first and second quarter, respectively,” Alphaliner said.

In addition, combined liftings reported by the main carriers shrunk by 1.5% during the third quarter, in what is turning into the weakest year for containerised shipping volumes since 2009.

Alphaliner predicts that the worsening financial performances have finally forced shipping liners to rationalise some of their unprofitable services. Carriers therefore not only suspended some loops, but also increased the number of skipped sailings since October.

What is more, additional capacity rationalisation moves are expected in December, as further services are due to be withdrawn.

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