Many analysts and optimists redicti we will see improved rates and an economic turnaround this year. I remain somewhat pessimistic about the market situation for 2010. Ocean carriers’ rates will not reach compensatory levels for much of the year and if things improve, it will not be until the fourth quarter.
If and when there is a recovery, I remain concerned again about the large vessels that will return to world trade. There are nearly 180 newbuildings of 4,000 TEU capacity, including 59 of 10,000 TEU-plus, ready to be placed into service in 2011. And more will follow: some 115 of 4,000 to 10,000-plus vessels in 2012. With this over-tonnaging yet again an issue, prices probably will still decline.
The 2009 losses among the carriers were daunting and legitimate rate increases are necessary.
Although shippers remain unhappy with any rate hike, another issue makes it difficult to stabilize the market. Carriers should be permitted to talk to each other. This is not to control the market — we all still maintain a real competitive culture — but it would help create an air of stability in an international trade scenario that remains in disarray. We all have learned this from the current economic downturn.
There is a great demand for costly environmental initiatives from the ocean carriers, including concern about emission problems. Our company was in the forefront of building technologically advanced environmentally responsible ships more than five years ago. We also issued a call to action in 2006 for a sustainable international transportation industry. These are expensive but vital requirements. Nevertheless, we find ourselves being asked very specific questions by some of the mega importers and exporters — such as how we figure the CO2 and carbon footprint of our vessels. In addition, the Environmental Protection Agency will be requiring 10,000 companies in 29 industries to monitor their emissions with penalties if certain criteria are not met scheduled to report to us government in 2011.
Shippers will certainly use this information as a tool for selecting carriers to move their cargo. This is an industry-wide issue we must all watch. The carriers cannot foot this costly bill alone.