The last two years were marked by supply chain disruptions, limited shipping capacity and notably high container shipping rates. But 2023 will be quite different, and not in a good way, at least from the perspective of the major shipping lines, WSJ reported.
Container spot rates began falling in early 2022 and their decline accelerated in the second half of the year. The Global Container Index compiled by Drewry is down 77% so far this year. And it is likely to fall further, signaling the end of a record profit streak for shipping lines. Rates are not much above pre-pandemic levels.
Next year, a rate war between shipping lines looks more likely: Slowing growth against a backdrop of inflation and high interest rates in the U.S. and an energy crisis in Europe could lead to a recession. And the drop in demand comes as the shipping industry also prepares for a massive delivery of new vessels.
Drewry forecasts that 2023 will see the largest addition of new vessel capacity in history: some 2.5 million TEUs, unless some deliveries are deferred. Shipping lines will struggle to manage the simultaneous decline in world trade and increase in vessel supply unless they can form alliances to reduce the number of itineraries, sell excess capacity and convince customers to sign long-term contracts.
Container spot rates began falling in early 2022 and their decline accelerated in the second half of the year. The Global Container Index compiled by Drewry is down 77% so far this year. And it is likely to fall further, signaling the end of a record profit streak for shipping lines. Rates are not much above pre-pandemic levels.
Next year, a rate war between shipping lines looks more likely: Slowing growth against a backdrop of inflation and high interest rates in the U.S. and an energy crisis in Europe could lead to a recession. And the drop in demand comes as the shipping industry also prepares for a massive delivery of new vessels.
Drewry forecasts that 2023 will see the largest addition of new vessel capacity in history: some 2.5 million TEUs, unless some deliveries are deferred. Shipping lines will struggle to manage the simultaneous decline in world trade and increase in vessel supply unless they can form alliances to reduce the number of itineraries, sell excess capacity and convince customers to sign long-term contracts.
SOURCE: MUNDO MARITIMO