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As we look back on 2017 and take stock of the Container Shipping industry – the forecast seems to bode good tidings. Are there finally good times ahead for the shipping industry or are there still choppy seas to sail through? We take a look at what went past and what lies ahead for us Through the Windshield Drewry’s latest report suggests that world container port handling rose by nearly 6% in the first half of 2017, but has slowed a little in the second half, giving a full-year rate of 5.5% For now, Drewry predicts that the industry is moving in the right direction and will make an operating profit in the region of $6 billion this year, with that sum rising again next year. In fact, given the list of global high impact factors at the beginning of 2017 – like Brexit, terror attacks in Europe, election of populist governments in Europe and of course Trump – it is surprising that the world trade indicator – Container Shipping Statistics – has shown an upward trend at all. So, all might not be lost yet and there’s a lot to look forward to. In the Rear View But before we look forward – it would be interesting to look back. The Industry has been through 8 years of Over Supply. The gap between Supply (in glut) and demand has widened since 2009 and has not yet peaked, with an estimated 1.3 million teu worth of extra slots hitting the waters in 2018. Freight rate volatility is also not showing any signs of stabilizing. All of this has ensured that most major Carriers have been in the Red for 2016 and have shown improvements only towards the last quarter of 2017. And has ensured that Carriers Blank sailings to manage excess capacity and schedule reliability has been at an all time low since 2012 (SeaIntel Maritime Analysis). It’s also been an uneasy year of consolidation – with the Alliance Landscape markedly different from what was expected in 2016. Between 1997 to 2014 – 6 large brands merged with other Carriers and lost their identity. But in just 3 years – from 2015 to 2017, at least 7 large brands have lost or will soon lose their independent identity. Moving Ahead – on uneven seas It would be interesting to see how the consolidation of the leading brands will affect the Freight Rates, Schedule and Services. Especially since we’re likely close 2018 with just 4 to 7 mega carriers. Freight rates which were temporarily up during mid of 2017, has fallen yet again. But on the brighter side, all Carriers (except HMM) have been profitable by Q3 2017 – compared to all Carriers (except Hapag Lloyd) being the in red in the Q3 2016. The profit outlook for carriers will be heavily tied to what transpired in the European contracting season. Drewry’s latest freight rate forecast for 2017 and 2018 is brighter than last few years. This is linked to the strong fundamentals and improvement of the liner operators’ negotiating position – even if the most recent spot rate movements on many routes have been trending downwards. In many cases, these look to be temporary in nature. Fortunately for carriers, they are now highly skilled in the art of capacity management. Dealing with the influx of new tonnage and where to redistribute the existing ships is something they have been forced to repeatedly deal with and they have coped well in 2017 so far. That task will be tougher next year, but for now, we have faith in their abilities to manage the process, something that will become more streamlined as the number of competitors shrinks. And 2019 will possibly see Supply and Demand balance out. And then possibly we can all let out a collective sigh after the very choppy seas we sailed through. Courtesy Sources:  SeaIntel Maritime Analysis Drewry U.K.