Soaring oil prices above $110 a barrel have forced vessels to reduce their speeds to save fuel, keeping them and the millions of boxes that they carry sailing for longer periods.
Container box availability has fallen to around 1.6 per twenty-foot equivalent unit (TEU) this year, from 2.2 four years ago, said Eng Aik Meng, president of APL container shipping line, a unit of Singapore's Neptune Orient Lines .
That translates into around 23.7 million container boxes available to the container shipping industry, which has a capacity of around 14.8 million TEUs.
"As early as April, you are going to see some shortages. I'm quite sure by peak season, you are going to have a severe shortage," Meng told reporters at a news conference. "Undoubtedly, freight rates will go up."
The peak season for the container industry typically begins sometime in the second quarter and ends a few months before the year-end holiday season.
"The peak season and slack season differential is going to be much larger this year and going forward. Cargo is going to be more seasonal than expected," Meng said.
Rates could also find support from limited rail and truck capacity in the United States and Europe, he said.
A similar box shortage last year led to a surge in freight rates that helped NOL, A.P. Moller-Maersk and other firms rapidly recover from a dismal 2009, when the economic downturn cost the industry an estimated $19.5 billion in profits. (Reuters)
