Prospect of Container's shipping market in 2023

During the epidemic, Container's shipping sector ushered in unprecedented prosperity, but in the coming year,Container shippingWill face the dual pressures of sluggish demand and rising capacity growth.

Daniel Richards, an analyst at Maritime Strategies International (MSI), a shipping consultancy, said that three factors will affect Container's shipping in 2023The prospect of is crucialFirst, trade growth; Second, fleet growth rate and size; Third, congestion and capacity management.

Prospects for trade growth

Richards pointed out that at least until the first half of 2023, due to excess inventory, pressure on the real estate market caused by interest rates and pressure on consumers' disposable income, the prospects for trade growth will be extremely challenging.

Fleet growth forecast

Capacity growth will accelerate significantly.MSI predicts that the capacity of container fleet will increase by 7% year-on-year in 2023 and 2024, and will exceed the average growth rate in 2025. If the scrap is not high, the annual growth rate of the fleet will be as high as 10%.

In its latest Container forecast report, Deluri pointed to a relatively low fleet growth rate of 1.9% in 2023.

Congestion and capacity management

The outbreak was marked by severe supply chain disruptions and traffic congestion in Container, but things are now changing.

Drury pointed out that the relief of supply chain congestion will increase effective production capacity by 19%, and bring the market back to the state of oversupply.At present, the measures to reduce production capacity have not yet been implemented: the proportion of idle motorcades has only slightly increased compared with three months ago, and the demolition has just begun.

Container freight

In the second half of 2022, the spot freight rate dropped sharply, which is far lower than the contract freight rate at present.According to Xeneta's data, the contract freight rate shows signs of starting to decline.

In the first half of the year, a large proportion of contracts need to be renewed, and the spot freight rate in the signing season has a great impact on the signing freight rate.The reduction of contract freight rate will depend on liner company, route and spot contract ratio.The MSI does not expect contract freight rates to fall back to pre-pandemic levels.

Impact on the profitability of liner companies

One of the main problems facing liner companies at present is the impact of falling freight rates on profitability.Mr Drury said that while profitability on Asia-West America and Asia-Nordic routes was rapidly declining, shipping companies were still making money, leading to insufficient incentive to cut capacity.But without better capacity management, the cost of these routes will soon exceed the revenue.In contrast, the revenues of transatlantic round-trip routes still far exceed the costs, making them the most profitable east-west routes.

Richards said that the performance of different routes will be different in the next few quarters.Asian-American routes may come under pressure earlier, and liner companies with a high proportion of long-term agreements will remain profitable for a long time.It is predicted that by the middle of this year, the prospects of the whole industry will be more optimistic, and the profits will tend to be normalized, which will not fall to the ultra-low profit level before the epidemic.

Great Link is inAirliftAndSea transportationHave a great price advantage in all aspectsWe serve 5, 000 companies around the world.We've dealt with a lot of Container.No matter in the peak season or off-season, we can guarantee the shipping space supply and quality service.For more quotations, pleaseClickOur representatives Find out more.