Mega container ships keep getting bigger – adding capacity to lanes. Total capacity is expected to grow 5% over the next 4 years while demand for boxes may be down (no trade deal) or up 2% (with a trade deal). To be profitable, steam ship rates on Asia-to-Europe trade route would need to go up 40% – 33% for trans-Pacific and travel more fully loaded.
It gets worse – estimates are that shipping companies will try to pass on to cargo owners about $10 billion a year in combined additional expenses from the new low-sulphur bunker fuel requirements.
Annual ocean-freight contracts now under way with big importers, including Walmart Inc., Home Depot Inc., Amazon.com, and Target Corp.