Rescues not in industrys best interests?

The consultant’s latest Container Forecaster indicates that the momentum of the industry has entered a new phase as financial aspects and implications seem to have become even more important than poor global demand and over-supply of ships, despite the clear inter-relation of each.

Neil Dekker, editor of the Drewry Container Forecaster, states that it might have been better for the long-term health of the container – and consequently the box terminal – industry if several of the large operators threatened by meltdown had not been rescued. “There is a strong argument for thinking that if a major carrier had been allowed to fail, the market would have had a much better opportunity to correct itself and lay the foundations for a more profitable industry in the long-term,” he said, adding, “a fairly large chunk of capacity would have been taken out of the market, allowing load factors and freight rates to improve.”

Drewry understands that at least ten one-ship KG owners have gone under recently and vessels have been sold, indicating that non-operating owners will continue to have an extremely tough time in 2010 given the propensity for carriers to return as much chartered tonnage as possible.