Freight carriers losses may reach $10 billion in 2016

According to the American Bureau of Shipping, 13 large shipping companies may suffer losses totaling 2.5 billion US dollars in the first two quarters of the year. This is confirmed by analysts of Sea Intelligence Consulting, who expect losses to reach 8 to 10 billion dollars by the current year end.

The main reason for this low performance is, according to the analysts, inability of many large players to cut costs, along with drops in margins. The situation is aggravated by the consolidation of a large market share by major carriers, resulting in a significant decrease in the cost of freight. For example, China COSCO Shipping posted a loss of almost 1 billion dollars on container shipments in the period from January to June.

Drewry reports that losses of container shipping companies may total at least 5 billion dollars. According to economists, many companies did not have enough time to adapt and optimize their costs against the background of the drops in the cost of freight. The situation can be improved by business activities aimed to cut costs.

 

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