Oversupply Challenge For Global Shipping

Overcapacity, Low Freight Rates Threaten Sector

Overcapacity and unsustainably low freight rates remain a “major challenge’ for shipping, according to the International Chamber of Shipping.

Following 10 years of challenging operating environment for shippers, the ICS points to a weak global economy and worsening demand for maritime transport as potential issues.

"The dark clouds of protectionism and slowing growth in key economies mean that the avoidance of overordering is now more important than ever … Opinion is still divided on whether the rapid globalization that has been experienced in the last 30 years may have run its course, and whether the slower rate of trade growth seen since the 2008 crisis represents some kind of permanent structural change," said Simon Bennett, deputy secretary general of the ICS.

Despite this warning, Bennet remains positive on the longer-term outlook citing record population growth and “unstoppable demand for higher living standards” as drivers for growth.

Photo: Simon Bennet. Credit: ICS