Cheap rates for container shipping since 2008 may be coming to an end.
The oversupply of container ships that sent prices tumbling following the financial crisis may have run its course, according to Bill Rooney, vice president of strategic development at Kuehne + Nagel.
The former executive with now-defunct Hanjin Shipping said that profit margins for shipping lines for the past decade have been stuck in the doldrums for too long.
Demand for ships is still growing, while capacity hasn’t grown since the crisis.
Maersk, one of only eight major shipping lines – down from 20 pre-crisis – has vowed not to buy any more ships this year.
Maritime researcher Alphaliner estimates the global container trade will rise 4.7% this year with another 4.4% gain expected in 2019.
“I think we are close to a tipping point,” Mr Rooney said. “I think we are getting to a point where it is evident that many companies are tired of only making 3% to 4% on assets that cost 10%.”