In 2011, it is estimated that the overall loss of container ship companies worldwide will amount to USD 5.2 billion, and the profit will decrease by USD 23 billion from 2010 when this industry achieved record-making profit.

Drewry, a London consulting company, warns in its latest quarterly report “Forecast of Container Transportation” that, “Despite some rise in transportation price last week, the prospect of 2012 is not promising.” Drewry estimates that if ship companies do not start idle transportation capacity plan as early as possible, the fund of some ship companies will be exhausted next year.

Though in terms of temporary data the trade volume this year increased by 5.6%, yet ship companies will return to loss again. Though the expected loss in 2011 is lower than USD 19.4 billion in 2009, yet the container shipping industry realized the historical high profit of USD 17 billion in 2010.

In early 2011, Drewry predicted that ship companies would keep making profit. However, the strategic transformation of ship companies to striving for market shares despite profit rate finally led to the collapse of transportation price. In the past one year, the spot goods transportation price of main ship routes dropped by over 50%.

Drewry notes in its quarterly report that, “2012 will be another very challenging year for ship companies.”

Due to unstable global demand, the delivery of super large ships will still be a difficult problem for the industry. Whether ship companies make profit or not will depend on their strategy for idle transportation capacity.

Though the number of idle ships is relatively small no, Drewry predicts that in the second half of this year, the idle transportation capacity will reach 8% of the global fleet, equivalent to 1.2-1.3 million teu. In the depression of 2009, idle transportation capacity once reached a record high of about 1.5 million teu.

When commenting on the current market situation, Neil Dekker, Drewry container business research director, said, “If we did not immediately leave transportation capacity unused on a large scale, the consequence would be very serious.”

Currently, most ships withdrawing from ship routes are sublet or put into other ship routes, and the number of idle ships is relatively small. However, this situation will not last too long.

Dekker said, “At a certain stage of 2012, ship companies will be forced to leave transportation capacity unused, even if some top ship companies do not have such tendency now.”

“This (idleness) will lead to some pick up in the spot cargo transportation price in the next half of this year. At the same time, industrial structure will also change as ship companies are gradually adapted to difficult situation. As in 2009, we predict that there will be no corporate acquisition case. What is more likely is the elimination of small companies.” He said.

Despite some rise in spot cargo transportation price in recent days, it is very likely a temporary phenomenon arising from the influence of the annual shipment peak before the Spring Festival.

Drewry points out that the greatest driving force for the industry is ship companies or unions vie with each other to deploy largest transportation capacity in main ship routes to ensure their advantages in unit cost. This has resulted in the development of a new pattern in Asia-Europe lines. Some ship companies chose to be united to share cost and share ships, to provide cargo owners with service like “Daily Maersk”.

Though many ship companies will continue to accept big ships in the whole year, yet the new pattern will be formed in April this year. Small ship companies with ships under 8,000 teu will find it more difficult to survive under the converging attack of three major forces.

Drewry also thinks that the fundamentals of east-west main ship routes at present are not stable, not sufficient for ship companies to realize continuous income growth. The company notes that from some service contracts signed for the Asia-Europe routes this year, the transportation price (all in price) is about USD 1,100/feu, beneath the breakeven line of ship companies.