THE world’s largest container shipping line said international freight rates are reversing after climbing for most of this year, raising questions about the sustainability of the global trade recovery.

Decade-old oversupply issues swamped demand for containerized sea trade in the third quarter, a senior official at Maersk Line Ltd. said. More than 90 percent of trade is routed through ships, making the industry a bellwether for the worldwide economy.

“We have started to see some pockets of downward pressure,” said Steve Felder, Mumbai-based managing director of Maersk’s South Asian unit. The global trade order book at around 13.5 percent of capacity isn’t high, “however, given that freight rates are largely determined on the basis of supply-demand balance, they remain fragile,” he said.

The International Monetary Fund forecasts growth in world trade volume will slow to 4 percent in 2018 from a projected 4.2 percent this year, though that’s still higher than the seven-year-low of 2.4 percent hit in 2016. Concern about U.S. protectionism and China’s attempts to rebalance its economy away from exports toward domestic consumption pose risks to the revival.

Maersk isn’t alone. Drewry Shipping Consultants expects the container shipping freight growth rate to drop to less than 10 percent in 2018 from 15 percent in 2017 as a supply glut hits home.

CMA CGM, the No. 3 container shipping company, recently signaled slightly lower rates for 2018 in early negotiations of Asia-Europe contracts, analysts at Credit Suisse Group AG wrote in a Nov. 29 note.

“It remains very early in the negotiation period, but this uncertainty is plainly unhelpful to investor confidence,” they said. (SD-Agencies)