International container shipping is one of the most dynamic economic sectors of the last few years. Between 1990 and 2005 the container trade at the world?s ports expanded by just under 10% p.a. on average (2005: +11%). The sector greatly surpassed seaborne trade overall and even the growth in international air transport. Deutsche Bank Research investigated the market and published their views.

The major reasons for the growth in container shipping are, on the demand side, the increasing international division of labour in the course of liberalisation and the resulting trade movements; and also the rise in importance of goods eminently suited to transport by container. On the supply side, the considerable expansion of the container ship fleets and faster loading and unloading of container ships are playing an important part; they allow short turnaround times in port.

The growth in international container shipping will continue for the next 10 years, with an only slightly reduced impetus. DBResearch expects annual growth of about 9% in container handling up to 2015. The main routes that are likely to achieve the greatest expansion include intra-Asian transport as well as the routes from North America and Europe to Asia. In contrast, transport between North America and Europe will increase less strongly. Of the 25 largest container ports in the world, 16 are in Asia, only three in North America and six in Europe.

Despite the increasing demand for container transport, until 2008 freight charges will probably stay below the level of the last two exceptional years. The main reason is the anticipated massive expansion of global container ship capacity. Between 2006 and 2008 the available container capacity worldwide will expand by about 50%. The shipyards? long order books for container ships argue against a rapid redress of the excess supply. Freight rates are still above the levels of 2001/2002, however.

The volume of total world seaborne trade ? measured in tonne miles (the product of distance and the quantity transported) rose by an average of 3.6% between 1990 and 2005. Maritime transport therefore forms the basis of the high, and largely constant, growth in world trade during the last few years. Compared with the dynamics of international container shipping, however, the growth in total seaborne trade appears modest. Since 1990, world container trade has expanded by close to 10% p.a. In the last year the volume of trade reached about 114 million TEU. According to first estimates, in 2005 the world container trade surpassed the level of the previous year by nearly 11%. This is a “weakening? in impetus compared with the years of particularly strong growth, 2003 and 2004, in each of which world container trade grew by over 14%.

View comple DBReseach report Container Shipping - Overcapacity inevitable despite increasing demand

Source: Deutsche Bank Research - Eric Heymann

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