That said, high rates may get baked into annual contracts. Investors are still bullish about the shipping companies’ prospects. Shares of the world’s largest container line Maersk have tripled since their March 2019 low.
That reflects a newfound restraint in an industry once notorious for its habitual destruction of shareholder value. It has held back from ordering large numbers of new ships, in part because of uncertainty over emissions-reduction technology. The order book was just 10 per cent of the fleet by year end, says Clarkson Research.
Competition in the industry has been dulled by an expanded system of alliances. That is a sore point for some customers, whose anger has been further fuelled by surcharges and cancelled bookings.
The current disruption adds to the arguments for lessening dependence on lengthy supply chains. After the pandemic has subsided, shipping container volumes are unlikely to keep pace with economic growth.
Financial Times
