Why NOL is still likely to struggle with orderbook problems until 2015

Spot rates have been diving sharply.

According to DBS, the Asia-Europe/ Mediterranean spot rates have nosedived at a speed we hadn’t anticipated at the start of 2013, and are currently at their lowest since early-2012. 

So far, three rounds of rate increases have proved unsuccessful in 2013, as the supply glut meant capacity discipline didn’t hold much sway.

Here's more from DBS:

This has had a cascading effect on Asia-US route as well, as more liners have deployed extra ships here in recent months, and annual rate negotiations are unlikely to have positive ramifications. 

With muted demand growth projections, orderbook deferrals into FY14, and some new orders still flowing from the likes of CSCL, the demand-supply outlook for FY14 doesn’t look as bright now, and we don’t think NOL will be able to achieve normalised returns before FY15.