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But the consultancy warns that “nothing should be taken for granted” in the current crisis, under which any companies or even states can go into default.

CONSOLIDATION of liner shipping carriers appears to have borne fruit, as seen in their ability to stabilise freight rates amid the unprecedented economic shockwave brought about by the coronavirus pandemic.

This is “fundamentally different” from the previous crises when decimated demand always led to a collapse in prices for container shipment, said Sea-Intelligence in its latest weekly report on Sunday.

“The consolidation of the past 20 years seems to finally pay off, in having created the possibility to mitigate the worst impacts of a crisis they otherwise have no control over.”

Rates remain stable despite the virus fallout, as the carriers have shown strength of capacity discipline.

Citing data from China Containerized Freight Index, Sea-Intelligence found that the overall shipping prices so far this year were higher than 2019.

Moreover, the rates over the past six weeks, during which liners’ operations were hit by the disease “in earnest”, were 11% higher compared to the same period of last year.    

“Despite the adversity in the market, the carriers have been able to maintain a very high degree of stability in the freight rates,” said the consultancy in its latest report. “This in turn also bodes well for their ability to avoid a catastrophic loss in 2020.”

Sea-Intelligence earlier forecast carriers could record a combined loss of $23bn this year should they see the collapse in both volume and rates reach the levels experienced during the previous crises. The shortfall will be narrowed to $800m if the current rates can be maintained, according to the estimates.

The steadiness comes as shipping lines continue their efforts in capacity withdrawal amid lower-than-expected demand.

As of end of last week, the number of total pandemic-led void sailings recorded by Sea-Intelligence has reached 435, up from 384 during the previous week.

As a result, capacity on Asia to North America west coast trade and east coast trade is expected to drop 25% and 20%, respectively, in the coming weeks, during which capacity on Asia-Europe services will be down by 30%.

However, Sea-Intelligence noted that Ocean Alliance had blanked consistently less than 2M or THE Alliance on Asia-Europe and transpacific trades.

“This of course raises the question whether Ocean Alliance is inherently less negative in their outlook or whether they aim to gain market share.”

Nevertheless, Sea-Intelligence foresaw a “declining trend” for freight rates with the low bunker prices starting to be factored in.

There is also another caveat for container shipping: “In the current situation nothing should be taken for granted.”

Drawing from the reading of the book This Time is Different: Eight Centuries of Financial Folly, the consultancy added: “Anyone could – expectedly or unexpectedly – run headfirst into default.

“This includes the whole range, from small companies, to state-supported actors, to nations themselves.”