Major container-shipping lines are slashing sailings on the world’s busiest shipping route between Asia and Europe as lower growth in China and a sluggish eurozone economy hurt container volumes.
The late summer season is normally a peak period for container shipping as retailers stock up for Christmas sales. About 95% of the world’s manufactured goods, ranging from toys and clothing to electronics and household goods, are moved by container ships. But a glut of tonnage in the water, combined with lower demand, is proving to be one the industry’s biggest challenges in recent years.
“Demand has been less than anticipated, and so far it’s proving a difficult year for container shipping,” said Jonathan Roach, a container market analyst with London-based Braemar ACM Shipbroking. “Global container capacity will increase 8.6% this year with the addition of new ships, while demand will only go up between 2% and 3%. This is putting a lot of pressure on freight rates, and container lines have no choice but to cut or cancel sailings.”