Shanghai Shipping Exchange says China should review its port and fleet expansion strategy to avoid overcapacity, as container transport in China is entering a period of steady growth.

The maritime intelligence unit, jointly established by China's Ministry of Communications and Shanghai Municipal Government for maritime data exchange, estimated that container throughput of Chinese ports would experience a 17% increase next year, exceeding 100m teu.

However, the unit warned that, compared to the rapid growth observed in the past, container shipping in China would enter a period of "steady growth". This could result in overcapacity at ports and the merchant fleet and could bring about vicious competition. The Exchange, therefore, urged the government and private enterprises to review their plans for port and fleet expansion.

SSE also said in its 2007/2008 Container Shipping Analysis that the liner shipping industry will become even more concentrated in the hands of a few companies in the future as a result of market consolidation. It suggested that the government tighten controls over alliances and freight conferences to avoid unfair competition.

Furthermore, the unit, forecasting around a 10% demand growth in the next two years, expected 2007 to be another gloomy year for container shipping, and a gradual recovery would only be seen in 2008.