DREWRY's quarterly update of its Container Freight Trends & Outlook says it expects global freight rates to fall again this year with carriers cutting costs at the expense of service, reports London's Loadstar.

But the January round of Asia-Europe contract negotiations posted a one per cent year-on-year rise according to Drewry research, a gain was driven by carriers exiting unprofitable 12-month deals in favour of the spot market.

Transpacific contract renewal season is in full swing, with new deals commencing in May and Drewry is more optimistic that carriers will make some gains against a backdrop of stronger economic fundamentals and more robust spot rates.

With an estimated 40 extra ships needed by transpacific carriers to overcome the scheduling problems caused by the US west coast port congestion, carriers need to negotiate contract improvements to mitigate the additional expense, said Loadstar.

"But global spot rates are on a downward trend, which will continue throughout March," said Drewry analyst Stijn Rubens, adding that it does not bode well for the raft of US$750-$1,000 per TEU Asia-Europe rate hikes.

The outlook for the rest of the year is poor, especially on the Asia-north Europe run where capacity is expected to rise seven per cent and 19 per cent between Asia and the Mediterranean.

Drewry expects 63 new containerships of 10,000 TEU or more to be delivered this year and another 67 in the 8,000 to 10,000-TEU range.

"No carrier will want to see new vessels half-empty on maiden voyages," he said, claiming this would add to the downward pressure on freight rates.