Drewry: Carriers gambled on new mega-vessels

The declining demand in the first months of 2015 on the major container trades between Asia and Europe constitute a huge risk for carriers. Their current risk-fraught gamble on the new ultra-large vessels will be exposed, says Drewry.

The major container carriers have many reasons to worry about the sliding demand on key trades between Asia and Europe, which is somewhat more serious than the large rate fluctuations and the current extremely low rate level, reports British analyst agency Drewry, stressing that the low demand in the first quarter 2015 exposes the carriers' risky investments in new ultra-large container vessels (ULCVs):

"The rush to order the biggest container ships might pay off in the long run but, at present, that gamble has backfired and carriers are faced with overcapacity in Asia-Europe, making it very difficult to see how rates will become sustainably profitable."

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