Container analysts SeaIntel have suggested that despite massive consolidation seen in the liner trades in recent years volatility has not dimished. SeaIntel analysed market volatility out of Asia, based on Shanghai’s CCFI rate index which encompasses both contract and spot rate data, over the past 20 years.
In Q1, Q2 and Q4 SeaIntel noted a gradual increase in volatility – most clearly in Q1 and Q2. During the full 20-year period SeaIntel recorded a tripling of the level of rate volatility in Q1 and a doubling in Q2 and Q4. Only Q3 has not seen a marked change in volatility.
“[I]n the path towards consolidation, it becomes increasingly important for the main carriers to maintain and grow their market share – and as the markets become more commoditized, increasingly freight rates become the most important tool with which to accomplish this objective – in turn driving volatility upwards,” SeaIntel suggested in a release.
Commenting on the data, SeaIntel CEO, Alan Murphy said: ”Consolidation is indeed seen as necessary in order to stabilise the markets – but the path leading to a critical mass of consolidation has the counter-intuitive effect of actually destabilising the markets.”