MUMBAI: Marine freight industry to reach value of $210 billion by 2021, helped by return of global demand as oil prices increase, according to research firm MarketLine.
"The recovery in the industry is expected to be fuelled primarily by a return of global demand as oil prices increase, and while it will take some time for the industry to reset to pre-2015 levels, the shrinking of industry value is short-lived," said Tom Hawthorn, an analyst at MarketLine.
"The players who survived 2015 are likely to have learned from this episode and to incorporate greater efficiency and cost-saving mechanisms in their businesses," he added.
The global marine freight industry has struggled in recent years, suffering from a negative compound annual growth rate (CAGR) of 3.3% between 2012 and 2016 amid an increasing oversupply and a collapse of global demand, according to MarketLine.
The company's latest report states that economic growth slowed across most of the world over this period, particularly in China, which has recently been the source of much consumer demand. This resulted in a fall in demand for transportation services in general, which forced prices down and led players to invest in their capacity to keep costs low, it stated.
MarketLine expects the marine freight industry to make a sluggish recovery. Despite the global industry value declining by some $44 billion (12.7%) in 2015, the industry is expected to return to 2014 levels by mid-2019 and reach a value of approximately $210 billion by 2021.