Consolidation has brought liners ‘unprecedented’ levels of rate stability

Thanks to enormous consolidation, container shipping has reached an “unprecedented” level of rate stability around the world, according to the latest weekly report from Copenhagen-based box analysts Sea Intelligence.

Analysts used the global rate index measured monthly by Container Trade Statistics (CTS), with the data series being available from January 2009 to June 2019 to study rate fluctuations.

The study shows that volatility reached a stable level from early 2017 onwards with Sea Intelligence saying in their Sunday Spotlight report that there is “a clear correlation between the reduction in global rate volatility and the degree of market consolidation”.

“In essence, this is exactly the type of development one would expect in any industry which undergoes a transformation from a high degree of fragmentation in a price-sensitive competitive environment, to a state resembling an oligopoly, where competition will increasingly shift to other parameters,” Sea Intelligence staff noted.

However, the analysts did point out at the end of their report that while the study pertains to the global average development, individual trade lanes can still exhibit above average volatility, as capacity is shifted between trades.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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