Port usage in northern Europe is falling as the shipment of manufactured goods declines, amid an oversupply of vessels that’s keeping container lines’ earnings below break-even levels on the Asia-to-Europe route, JPMorgan said.
The following are comments from Christopher Combe, head of transport, equity research at the Capital Link 5th Annual International Shipping and Marine Services Forum in London today.
“Given the massive overcapacity in the shipping sector, rates have now gone below cash break-even for the operators and they are pushing in a very big way for rate increases. Time will tell how successful they’ll be. We suspect it’s going to be very tough.”
On utilization rates for northern Europe ports:
“We’re at the point where we are near bottom. How long we’ll stay there is not very certain. The key is that average utilization across the northern European ports is about 85 percent. It’s very difficult to get any pricing power. It’s currently, at best, close to 80 perhaps or just below. There are no real signs of confidence that we’re anywhere near the point where pricing power emerges.”
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