BIMCO: Room for Optimism Despite Depressed Container Market

Peter Sand, Chief Shipping Analyst at BIMCO, remains optimistic for the container industry despite current low demand.

Peter Sand, Chief Shipping Analyst at BIMCO, says that while low demand in the container shipping industry's high volume trade lanes is putting pressure on carriers' earnings, he maintains that there is still "room for optimism."

"Volume growth on the vital trade lane from Asia to Europe and Asia to U.S. West Coast were down by 4.2 percent and 2.0 percent respectively. Whereas demand growth was positive on Asia to U.S. East Coast and on Intra-Asian trade lanes," said Sand.

"Increased private consumption in EU and the U.S. should provide higher demand for containerised goods on the vital high volumes trade lanes than what we have seen in first half of 2015. This will slow down cascading.

"Demand on Intra-Asia will stay positive, whereas new demand may arise from Iran, Cuba, Brazil, and Africa."

Sand, whose comments came at the Maritime Cyprus 2015 Conference, notes that the dry bulk and the tanker industry are both on similar trajectories as the container freight market and have hope as well.

Sand further noted that the U.S. East Coast will become a new "battlefield" and greater focus once the Panama Canal expansion project is completed in 2016.

"We expect to see a significant change to the ship sizes that will call U.S. East Coast ports, as the ports have prepared themselves for the opening and stand ready to receive Ultra Large Containership coming via both the Panama as well as the Suez Canal," explained Sand.

"Competitive canal transit pricing is likely to play a central part when networks are optimised next year."

In January, Sand suggest that the collapse in oil prices, and corresponding decline in bunker prices, could see vessel owners scrap less vessels as they keep aging ships longer in order to take advantage of lower bunker prices.