To gauge whether trends facing container carriers points to a new normal[ds_preview], Boston Consulting Group (BCG) analyzed global trade developments in 2015. While an increase of 3.3% in container demand in 2014 excited the imagination of carriers and analysts, in 2015, reality hit hard. By the end of 2015, average global growth in container-shipping trade was 1.9%. Yet liners still invested in new, ultralarge vessels to boost scale and reduce slot costs. This exacerbated existing overcapacity problems, pulling freight rates down to a new low. For the first time in history, growth in container demand lagged behind global gross domestic product, producing a GDP multiplier lower than 1. To succeed, container liners will need to craft more sophisticated strategies for boosting their performance. To improve their performance, these companies need to use a blend of global mergers and smaller M&A deals aimed at driving down costs. They should also seek to unlock even greater synergies from their alliances, BCG says.
