London-based shipping analysts Drewry recently gave a blunt assessment to dry bulk shipowners: Cut half your Capesize ships over 12 years old or you will not make a profit for at least another two years.

The analyst could have said the same thing about the container shipping business. Financial results are starting to roll in and they are not pretty.

Even for carriers that will remain in the black there will be steep drop in net earnings. After a reasonably okay first quarter, the container shipping market in 2015 went into a steady decline, culminating in a peak season-less fourth quarter.

Disappointed lines were counting on the traditional surge in containerised exports from Asia in January before the long Chinese New Year holidays to boost earnings and they hit the market with a late December general rate increase. But the expected surge did not materialise and the GRI pulled rates up for just one week before they began to slide once again, especially on the Asia-Europe trade.

Some carrier results have come in. Mitsui OSK Lines was still in profit by the end of December, but the Japanese carrier has forecast an eye-popping US$1.5 billion loss for the full financial year that ends on 31 March. OOCL’s operational update showed revenues for the year fell 10 percent even as container volumes remained basically flat.

The weak rate environment could be seen in OOCL’s overall average revenue per TEU that decreased by 10 percent compared to 2014. In the fourth quarter the average revenue per box was down an incredible 17.3 percent.

A combination of chronic overcapacity and falling demand pushed freight rates to record lows in 2015 and that has continued into this year. At one point forwarders were reporting rates of under US$150 per TEU on the Asia-North Europe trade.

Around 1.7 million TEUs of capacity were added to the global fleet last year, with BIMCO (Baltic and International Maritime Council) estimating that container volumes grew just 1.1 percent. This year 850,000 TEUs will float into service, most of them in ships of 8000 TEUs and above.

Analysis by Alphaliner supports this and shows that a combination of fewer deliveries and greater numbers of ships being demolished means the less than 1 million TEUs being added in 2016 is a record low fleet growth.

Yet even with the moderating capacity growth, Alphaliner said the supply-demand equation remained heavily imbalanced because of the surplus ships carried over from 2015 and weak cargo demand growth.

As carriers sail into the post Chinese New Year slack period burdened by surplus capacity and weak demand, the first quarter is sure to financially be one to forget, as will be the rest of 2016, we expect.

Supporting this gloomy outlook is factory output in China that in January fell to a three-year low, according to official statistics, and new orders slowed. Without a robust increase in demand from the major consuming nations, there is little chance of the excess shipping capacity being better utilised and zero chance freight rates will improve beyond a brief, post-GRI spike.

Rock bottom bunker fuel prices are the only thing keeping container lines buoyant at the moment, but imagine being dependent on a self-serving, squabbling and unpredictable group of oil exporters that could decide to switch off the production taps at any time.