IT WAS clear a couple of years ago that the world's big container-shipping lines were sailing into a storm too big to steer around. Back in the mid-2000s, when world trade was booming, they had ordered fleets of huge new boxships, only to take delivery of them during a downturn. This led to overcapacity, and an all-out price war in 2011, as container lines sought to fill their new ships and defend their market share. To make things worse, oil prices were soaring despite the weak world economy, adding greatly to the shippers" running costs. Having made combined profits of around $7 billion in 2010, the container lines slumped to losses of about $5 billion in 2011. So, faced with the prospect of sinking further under water this year, the shipping lines began idling or scrapping older vessels. They also ordered their captains to begin "slow steaming": cutting their speeds to save fuel. Then, in December, several new alliances were announced. Rival lines agreed to share space on board their vessels, allowing them to idle more of their surplus ships. Two of the biggest lines, MSC of Switzerland and France's CMA CGM, bunked up together. Two earlier tie-ups, each involving three lines, were spliced into a new group, G6, bringing together firms from Japan, South Korea, Hong Kong, Singapore and Germany. And Taiwan's Evergreen line said it would co-operate more closely with CKYH, an East Asian alliance that includes China's state giant, COSCO. All this clubbiness has consolidated a fragmented industry. On the busy routes from Asia to northern Europe the three super-alliances, plus Denmark's Maersk Line, the industry's alpha male, together have a market share of about 93%, according to Containerisation International magazine, an authority on shifting big metal boxes across the oceans. Apart from the generally dire state of business, what prompted Maersk's rivals to join forces was their need to compete with the "Daily Maersk" service that the Danish firm launched late last year, with more frequent voyages and guaranteed delivery schedules (an attractive proposition given the shipping industry's reputation for unreliability). Competition laws stop such alliances from agreeing explicitly on prices, of course. But no sooner had they been formed than the shipping lines began to announce rate rises one by one. As each round of increases seemed to stick, this encouraged the ship operators to push further, and soon rates were back around their pre-slump levels (see chart). According to Greg Zikos, chief financial officer of Costamare, a Greek shipowner which rents its vessels to container lines, they have come to their senses following last year's price war, and are now seeking profits, not market share. Slow steaming has created work for a lot of ships that would otherwise have been idle, explains Vincent Clerc, a Maersk executive. A busy route between Asia and Europe may now take six or seven days longer, so it may need perhaps 12 ships instead of nine to provide the same capacity. Dimitris Morochartzis, an analyst at Lloyd's List Intelligence, is also optimistic that the worst is over. The glut of new container ships is ending, he notes: the current order book is only 24% of the existing fleet, down from 60% in 2008. And the newest ships, being bigger, are more efficient to run. Even so, Mr Morochartzis reckons the container lines will be happy just to break even this year. John Fossey of Containerisation International is gloomier. For a start, he says, besides Maersk there are also several smaller shipping lines on the main trade routes which have not joined alliances. These shippers may undercut their giant rivals, starting a new price war. Mr Clerc says that although Maersk, for its part, is not about to start such a war, it would not stand idle if others started to munch its market share. Any further fall in world trade would also undermine the fragile truce. It may be just a blip, but in recent weeks, even as the shipping lines have announced further price rises, average rates have fallen, amid signs of a weakening global economy. Euro-storms ahead The biggest threat to container shipping's recovery, Mr Fossey says, is if the euro crisis gets even worse and causes a slump in European imports from Asia. Mr Clerc says Maersk has made "worst-case" contingency plans for a fall of 15% in the volume of trade between Asia and Europe. Were that to happen, it would cut capacity to avert a collapse in prices. Such a disaster would also probably bring down oil prices, mitigating the losses that the shipping firms would suffer. But their hopes of returning to breakeven this year look frail. Still, a crisis for some is an opportunity for others. Costamare, which resisted over-ordering ships in the boom, has been taking advantage of a weak market for used container ships and strong demand for scrap steel. In a recent deal it scrapped two old ships and bought two bigger, newer ones from MISC, a Malaysian shipper which is quitting the container business. This allowed Costamare to revamp its fleet for a fraction of the cost of ordering new vessels. Shipping lines that run into trouble are having to hand the keys of their big, new ships to their banks, which means more opportunities for shippers, such as Costamare, with cash to spend. "In shipping, everything has to do with timing," says Mr Zikos.