SLOWING global trade and a bloated orderbook of large vessel capacity mean that container shipping is set for another three years of overcapacity and financial pain, according to Drewry's latest Container Forecaster.

"How carriers and tramp owners address the situation will influence the duration of the crisis," said Drewry's top analyst Neil Dekker, reported the American Journal of Transportation. 

"Shipping lines will need to idle a much larger portion of the fleet than they have been prepared to do. Otherwise, container shipping is set for several years of mounting financial losses," he said.

The recent slowdown in world trade has forced Drewry Maritime Research to halve its forecast for container shipping growth for this year to just 2.2 per cent and lowers estimates for coming years. 

Meanwhile, an additional 1.6 million TEU of new capacity is being added this year, equating to a growth rate of 7.7 per cent. Thus, Drewry's Global Supply/Demand Index has fallen to 91 in 2015, its lowest since 2009.

Consequently, spot freight rates across most key trades have fallen to historic lows, particularly on the Asia to Europe, Asia to east coast of South America and Asia to Middle East trades. 

Carrier reliance on the monthly GRI mechanism and void sailings to adjust capacity has not worked, says the London consultancy and research house.

"Were it not for the recent fall in bunker prices, shipping lines would be losing money," said Mr Dekker. "They cannot continue to rely on this unexpected gift to maintain profitability."

Some carriers have started to remove significant capacity from certain trades. Two alliances have each removed a single loop in the Asia to North Europe trade and the G6 alliance has taken out two strings in the transpacific trade

Although this is part of their usual winter re-deployment, on the smaller trades, Maersk has removed its smallest service on the Europe-South Asia route. 

"After a horrific year, five carriers decided to suspend their weekly service of panamax ships operating between Asia and east coast South America, which will remove around six per cent of operational capacity," said Drewry's report. 

But with 1.3 million TEU to join the global fleet in 2016, many routes that are experiencing problems will be further hindered by new deliveries and the continued global cascade.