Drewry: Maersk Line's market in chronic overcapacity

2016 has been miserable for the container market thus far, while greater overcapacity and the lowest rates ever lie ahead, projects Drewry. The analyst firm points to bleak prospects for the world's largest container carrier, Maersk Line, which will publish its annual report in a few weeks.

Photo: Maersk Line

Maersk Line, the world's largest container carrier, has sailed into 2016 in a storm of bad news, and with a vessel overcapacity that is beginning to look chronic, going by a rough summation of analyst firm Drewry's latest share update about the Danish carrier.

The update notes, among other things, that the underlying market conditions have deteriorated in the first quarter of 2016, as the spot tumbled to an all-time low. At the same time, Drewry's industry sources confirm that the new freight agreements signed within the last few months have been fixed at significantly lower rates than last year, thus further undermining Maersk Line's chances delivering profits anytime soon.

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