Container shipping has sailed through the coronavirus pandemic largely unscathed, as ship-sharing alliances and supply curbs to bolster freight rates have helped operators to offset tepid trade demand, reports Platts.
These new approaches to manage capacity will help the industry cope with the long-term challenge of overcapacity in the years ahead.
When the pandemic started to hit global trade in March, these alliances were able to move quickly and decisively to reduce overcapacity and prevent a sharp drop in freight rates. Collectively, they have voided, or “blanked,” more than 400 sailings this year — removing 10% of nominal twenty-foot equivalent units (TEU) capacity from active service.
However, shipping alliances cannot afford to be complacent. If a second-wave of COVID-19 spreads, or political turmoil between the US and China threatens global trade again, the carriers will need to show the same unity that has paid off so far this year.
The container industry’s success this year in such testing conditions should give it the confidence and conviction to tackle its overcapacity issues. The pandemic has proved there is strength in numbers for shipping lines dealing with a volatile market.
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