The consequence of new, high capacity tonnage coming into service is that inevitably existing tonnage will cascade down into other trades, in the process realising a capacity increase in these trades. Trades where this scenario is likely are numerous and typically include Europe-South Africa, Europe-South America and Asia-South America container services. For this to happen, though, port system upgrades will be necessary, particularly the provision of deeper draught to allow access to higher capacity vessels.

Interestingly, then, at a time when the economic climate is not at its best many ports may be called upon to implement significant upgrade works due to system changes encouraged in part at least by a knock-on effect. Further, these new vessel types could in some cases result in new methods of working in certain trades, such as a greater reliance on transhipment.

So just how bad, practically speaking, are things in the shipping markets? The Asia-North Europe trade tells the story. Westbound volumes in this key trade have grown just 6% over the first six months of this year compared with 20% last year over the same period. Capacity utilisation westbound for some lines is now down at around 65 as opposed to 85 for most lines a year ago.

Where the difference is most striking compared with a year ago, however, is in terms of rates; the cost per teu is now typically $500 compared with $1,300 previously. This alone highlights how far things have slipped from the highs of just 18 to 12 months ago, and the serious nature of the business climate that the lines now face.

There are over 60 Asia-North Europe and Asia-Mediterranean services and over half of them have now implemented slow sailing to save on fuel costs, although in this area there are now some signs of relief with fuel costs now falling rather than climbing as has consistently been the case over recent months. There is nevertheless some way to go before lines will feel any tangible benefit.

Suspended sailings are another reality in the Asia-North Europe and Asia-Mediterranean trades. Typically, the CKYH alliance has dropped one sailing out of every nine or ten sailings and others have either adopted a similar strategy or are expected to do so forthwith.

Bottom line, when the liner shipping markets hit a time of pain not gain they tend to do so very quickly and this, in turn, spells a time of change and the need to adapt for the port industry. And last but not least it should not be forgotten that this will include a much more tenacious approach to signing port contracts. With demand falling off there is inevitably much more room for manoeuvre.