Container Overcapacity Expected to Hit Hard in 2024

The container shipping market is expected to be hit hard by overcapacity from 2024 onwards. In its latest weekly report, shipbroker Intermodal said that “Intermodal’s recent participation in the Busan International Port Conference marked a significant step in keeping abreast of the evolving dynamics of the global shipping and port industries. The conference, hosted in Busan, served as a critical forum for industry leaders to exchange insights on current developments and future trends”.

According to Intermodal’s Research Analyst, Ms. Chara Georgousi, “in the coming years, a notable imbalance between capacity growth and demand poses a significant challenge for the container shipping sector. With an expected excess in capacity over demand, stemming from a combination of larger year-on-year growth and weak demand since 2019, the industry faces potential overcapacity challenges. This scenario is vital for strategic planning and operational adjustments within the shipping sector. The conference also spotlighted the emerging focus on the Indian Ocean Rim as a new core growth region, presenting distinct challenges, particularly for South Korea. As this area gains prominence in global trade, it calls for a strategic reevaluation by companies operating in or through this region”.

Ms. Georgousi said that “for the ports sector, key topics discussed revolved around slow growth, geopolitical tensions, evolving trade patterns, energy transition, digitalization, and automation. Despite flat global volume growth and a subdued growth outlook, ports are increasingly integrating themselves into the broader supply chain. Port authorities are taking on more significant roles, including mergers and developing inland ports, to create synergies and manage competition in this low-growth environment. Additionally, the conference highlighted the dual role of ports as both significant sources of emissions and providers of solutions in the face of emissions reduction and energy transition. Strategies like alternative fuel provision and electrification of handling equipment are crucial. Notable initiatives include Tianjin Port’s development of the world’s first zero-carbon terminal and the Port of Antwerp-Bruges’s significant wind power generation”.

She added that “the EU’s decarbonization regulations, aiming to make Europe the first climate-neutral continent by 2050, were also highlighted. The ‘Fit for 55’ package, with its goal to reduce GHG emissions by at least 55% by 2030, includes revisions to the EU Emissions Trading System and the introduction of initiatives like ReFuelEU Aviation and FuelEU Maritime. These developments underscore the need for alignment with environmental goals in the maritime sector. In summary, the Busan International Port Conference provided essential insights into the changing landscape of shipping and port industries. These insights will guide Intermodal in refining our research and strategies, ensuring we remain at the forefront of the industry”, Ms. Georgousi concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide