Drewry: Drastic measures needed to stop rate erosion

Unless demand picks up significantly, carriers will need to use more drastic measures and start pulling out ships from Asia-Europe on a large scale in order to restore rates to profitable levels, says Martin Dixon, Research Manager at Drewry, to ShippingWatch.

How carriers decide to handle the deluge of overcapacity that is increasingly inserted into Asia-Europe in the coming months will be critical to the development of the freight rates, says Martin Dixon, Research Manager at analyst agency Drewry.

According to the latest numbers from the Shanghai Container Freight Index (SCFI), the spot rates have gone down USD 483 per teu in just four weeks, the lowest level since February 2012. An escalating development that made the CEO of the world's largest carrier, Søren Skou of Maersk Line, warn on Thursday that the market is facing an imminent and extensive price war if the carriers don't start to pull ships out of Asia-Europe.

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