THE 20 largest container shipping companies lost a total of US$1.3 billion between 2008 and 2012 which Netherlands-based Dynamar attributes to greater volatility in the industry due, in part, to the creation of the Shanghai Containerised Freight Index (SCFI).

A Dynamar report on the top 25 container liner operators highlights three events that "caused container liner operators to sail through extremely turbulent waters - the September 2008 collapse of Lehman Bros, leading to worldwide economic disaster; the October 2008 banning of the Far East Freight Conference system by the EU and the October 2009 creation of the SCFI.

 "Although the 2009, 10-per cent drop in worldwide container trade was repaired by a growth of 11 per cent in 2010, by then continuous volatility with respect to freight rates had taken hold of the liner trades. This was, not in the least, due to the SCFI spot rates out of Shanghai to selected destinations."

 SCFI rates have been "widely published and commented upon, creating a new transparency and, therewith, a different rate level awareness. Soon, the SCFI had become a benchmark to whose levels shippers/consignees expected their rates to be adjusted every week again. 

"Therewith, indices based on spot rates had developed as a leading indicator for contract rates. The effects were further aggravated by seemingly ever shorter economic cycles," said Dyanmar.

 "Cost reduction, in the form of larger, less fuel-consuming and more efficient ships has been the answer of many of the top 25 container liner operators, who followed the example of Maersk Line, which launched the 15,600-TEU Emma Maersk in 2006."

 It said those ships have been particularly attractive to operators on Europe-Far East trade, with 17 of the top 25 carriers serving the trade during 2013 using those ships.

 A carrying to capacity ratio created by Dynamar for the new report shows that "carriers' indexed containership capacity has, since 2005, grown faster than their indexed full container volumes. The former is now exceeding the latter by 20 per cent. The flood of big ships may well have contributed to this situation."