Forecast of the container shipping market in the second half of 2023

Forecasting the shipping market in the second half of 2023 focusing on the container sector, Seatrade Maritime Podcast had an interview with analyst Daniel Richards of Maritime Strategies International (MSI). Here are some of the key questions and forecasts that were raised:

Have spot container freight rates stabilised?
 

Speaking to the Seatrade Maritime Podcast, Richards believes that for now at least spot container freight rates have stabilized. While there hasn't been much downside, he said, "We're still seeing some further erosion of freight rate levels on some long-haul trades," due to events such as the threat of a harbor workers strike on the US Coast in June.

While Richards believes spot container prices have largely stabilized at the moment, there are no signs of a strong recovery in the near term.

Do contract container rates have further to fall?
 

Richards said that while the new contracts negotiated this year are much lower than the 2022 contracts, they are still higher than the levels seen in 2019 before the pandemic.

“If you look at the global container valuation index released by Container Trade Statistics in May, it's around 20%, which is higher than we were in 2019. So that gap, it looks like it's going to narrow a bit more.” The average freight rates reported by container lines in their financial results are expected to fall further in the third and fourth quarters of this year before starting to stabilize in 2024.

Newbuilding deliveries and the impact on demand and supply
 

The wave in capacity from new ships is expected to begin arriving this year. Q1 saw 360,000 TEUs of new capacity delivered and around 600,000 TEUs of capacity in Q2.

“By the end of July we're probably looking at the volume of new vessels hitting the water being equal to what we saw in the whole of last year. And this is not yet being really offset with much in the way of vessels scrapping with only around 65,000 teu of vessels scrapped so far this year. So, it's building up pressure on trade lanes" Richards said.

Will containership newbuilding deliveries be delayed?
 

Richards noted that some shipyards are experiencing problems with shortages of skilled workers, which could be the reason for some of the delays in ship deliveries. “But so far, the really big Megamax 24,000 teu containerships are arriving at a pretty brisk rate at the moment.”

Read more:

• Port of Rotterdam reduces container volume and profit in the first half of 2023
• Shipping industry faces challenges from climate change
• International shipping and logistics market update - Week 29/2023

Source: Phaata.com (According to SeatradeMaritime)

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