In the
first-of a four-part H2 2023 shipping market outlook series we are
focusing on the container sector with Maritime Strategies International
(MSI) analyst Daniel Richards.
Have spot container freight rates stabilised?
Speaking
to the Seatrade Maritime Podcast Richards believes that at least for
now spot container freight rates have stablised. While there hasn’t been
much downward movement he says, “We're still seeing some further
erosion of freight rate levels on some long-haul trades”, driven by
events such as the threat of a dockworker strike on the US Coast in
June.
While
Richards believes container spot rates have largely stabilised at
present there are no signs of a strong rebound ahead either.
Do contract container rates have further to fall?
Richards
says that while new contracts negotiated this year are at much lower
rates than those in 2022 they are still above the levels seen in 2019
pre-pandemic.
“If
you look at the global container pricing index put out by Container
Trade Statistics in May that was around 20%, above where we were in
2019. So that gap, it feels like it's going to close a bit more.”
Average rates reported by container lines in their financial results are
expected to fall further in Q3 and Q4 this year before starting to
stabilise going into 2024.
Newbuilding deliveries and the impact on demand and supply
The
expected wave of new vessel capacity has started to arrive in earnest
this year. The first quarter of the year saw 360,000 teu of new capacity
delivered, and some 600,000 teu of capacity in the second quarter.
“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,” says Richards.
Will containership newbuilding deliveries be delayed?
Richards
notes that some yards are having issues with shortages of skilled
labour which might provide the excuse for some delivery delays. “But so
far, the really big Megamax 24,000 teu containerships are arriving at a
pretty brisk rate at the moment.”
source:Seatrade Maritime News
https://www.seatrade-maritime.com/containers/container-shipping-market-outlook-h2-2023