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Cargo volume rose 2.2 per cent, but capacity soared 9.1 per cent, and the four major shipping companies predict that 2024 will be even more deadly......
Oct 16,2023
Recently, according to media reports, Maersk, Dafei, ONE and Evergreen Shipping, the four major shipping giants, have all made a forecast on the shipping market. Evergreen even admitted directly that 2024 will be full of challenges.
Four major shipping companies release market forecasts
It is reported that Maersk announced its financial report for the first half of the year and also announced its forecast for the future market. There are three main points: the global container trade volume will shrink by up to 4%, and the inventory removal adjustment is expected to be postponed to the end of the year;
Profits in the first quarter are likely to be the best quarter of the year, and there are still many challenges in the second half, including inflation, interest rate hikes, recession risks and some uncertainties. Maersk raised its low target for EBITDA for the whole year, which is expected to reduce the impact of the recession by cutting costs.
At the same time, Dafei also released its views on the future: the second half of the year continued to be affected by inflation, interest rate hikes and geopolitical uncertainty, slowing global growth and sluggish transport and logistics markets.
The additional capacity in the coming quarters will continue to put pressure on in stock shipments, especially on east-west routes;Trans-Pacific and Asia-Europe routes were affected by slowing household consumption and retailer destocking.
Japanese shipping company ONE said that changes in consumer behavior and increased international tensions have led to changes in trade patterns; transportation demand and trade patterns are constantly changing, and market prospects are difficult to predict.
Different from ONE's attitude that the prospect is unpredictable, Evergreen Shipping, a Taiwan shipping company in China, said bluntly that the days of daily gold-making in the shipping industry in the past two to three years are no longer the same, and 2024 is full of challenges.
Xie Huiquan, general manager of Evergreen Shipping, described the 2024 shipping market in 28 words:"After the epidemic, the market is two things, the shipper owner is against the line, the imbalance between supply and demand is difficult to keep, the ups and downs are surprised."
Volume growth 2.2 percent, capacity growth 9.1 percent
According to Alphaliner data, the supply of space in the market is expected to grow by 9.1 per cent in 2024, but the volume growth is only 2.2 per cent, and the tone of capacity remains an imbalance between supply and demand, especially on the European line.
Europe's slow de-stocking and supply surge, this year even put in 30 24000 TEU container ships, so supply and demand will worsen.
Based on this data, Xie Huiquan, general manager of Evergreen, said conservatively that the fourth quarter is the traditional off-season. Due to the influence of high inflation and high interest rates, the cargo volume of various routes is generally less than that of previous years, but the freight rate is the same, and the overall revenue of the fourth quarter will be lower than that of the third quarter.
At the same time, he worries that 2024 will be a challenging year unless there is a major event sufficient to reverse supply and demand, such as the new crown epidemic, so Evergreen is preparing for 2024.
According to foreign news reports, many companies cannot afford the breaking price of the European line,For example, Dafei and Hapg-Lloth successively announced an increase in European line prices on November 1,It can be increased by about 500 to 1,000 US dollars compared with the spot price. Whether the increase is still sufficient depends on the customer's acceptance.
At present, the market situation of the container shipping industry is in the doldrums, and the dismantling of ships has begun to accelerate. According to the information released by the Alphaliner, only 24 container ships were sold for dismantling in 2022, totaling about 21500 TEU.
However, as of September 20 this year, 80 container ships have been sold and dismantled, totaling 133500 TEU, far exceeding the number of ships dismantled in 2022.
However, Xie Huiquan also said that this is still some distance from the detachable 500000~600000 TEU during the peak period of shipbreaking in the past.This also reveals that the dark period of shipping has not yet arrived.
Is there a chance that freight rates will rise without quantity?
Recently, shipping companies have started a new round of price increase plans. CMA and Hapg-Lloth Shipping Company have successively issued price adjustment notices for some routes, announcing increases in FAK rates for Asia, Europe and the Mediterranean...
A few days ago, Hapg-Lloth said it would raise FAK rates from the Far East to Northern Europe and the Mediterranean. The announcement shows that from November 1, the FAK rate will be increased for goods transported in 20-foot and 40-foot containers (including tall containers and refrigerated containers) from the Far East to Europe and the Mediterranean (including the Adriatic Sea, the Black Sea and North Africa).
Then, Hapg-Lloyte announced an increase in the price of GRI routes from Asia to Latin America. The announcement shows that the general rate (GRI) for goods from Asia (excluding Japan) to the west coast of Latin America, Mexico, the Caribbean and Central America will be increased.
This GRI applies to all containers from October 16, 2023 and is valid until further notice. $250 for 20-foot dry containers and $500 for 40-foot dry, tall, reefer containers.
In addition, CMA also announced an increase in FAK rates from Asia to Northern Europe. Effective November 1, 2023 (date of loading) until further notice. Rising to $1000 per 20 feet dry box and $1800 per 40 feet dry box/tall box/reefer.
And a subsequent increase in FAK rates from Asia to the Mediterranean and North Africa. Effective November 1, 2023 (date of loading) until further notice.
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