Yesterday, in The Container Shipping Manager, we looked at what determines rates in container shipping by first examining the relationship between costs and prices - and found very little connection between the two.

Today, we shall explore this further, but this time comparing the market rate vis-a-vis the supply and demand situation to see just what impact this has on market rate movement.

To identify whether there is a link between supply and demand on one side, and carrier freight rate movement on the other, we will look at the following factors.

First, we again check data from the China Containerised Freight Index (CCFI), which we examined yesterday.

As noted then, the CCFI takes the average level of freight rates for carriers plying 11 trade lanes from China. As most of the world’s trade originates from China, this should provide a sufficient overview of what has happened in world trade in the past 12 months.

Another factor providing insight into supply and demand is the lay up rate.

Rises and falls in the number of idle ships show what vessel operators experience in tonnage utilisation over the last year.

There are of course other factors to consider.

The level of lay ups in the industry at different times in the last year will provide snapshots of what the lines saw in terms of supply and demand.