Ti: Falling demand, decreased congestion and an in increase in capacity are driving down freight rates in the final quarter of 2022
Falling demand, decreased congestion and an in increase in capacity are driving down freight rates in the final quarter of 2022.
Ti Insight’s Q4 2022 Ocean Freight Rate Tracker provides transparency on current sea freight rates, capacity, congestion and container availability by trade lane, and maps out expected rate development for each quarter and out to 2023.
The whitepaper, which can be downloaded for free here – is one of several whitepapers published each month by the Ti team, utilising data from its GSCI knowledge portal, a data powerhouse with over 1million pieces of data and analysis.
The latest report provides critical insight on spot market demand, shipping supply side, ship building, Transpacific rates, Transatlantic rates and China/East Asia to Europe rates.
Key data from the White Paper:
Maersk, which controls approximately 16% of the market, has increased the proportion of contracts in its service mix from 61% in 2020 to 71% at present. This results in a 41.7% increase in freight rates.
During Q4 2021-Q2 2022 rates hit roughly eight times those seen in Q2 2021. Towards the end of Q2 2022 the market changed, with a marked fall in rates.
The number of container vessels ordered has leapt-up, with the tonnage of vessels on order increasing by at least 100% in 2021 as compared to 2019.
Transpacific remains the most prominent trade at the global level in terms of determining overall market conditions. This is due to the US and to a lesser extent China being trade destinations that shape world trade at present.
Transpacific is no longer as Chinese as it was 3-4 years ago. Vietnam in particular is more important, and growing in importance.
The energy economy in many European economies is leading to structural change, with longer-term implications for the container shipping market. The implications for German industry are particularly serious.
Chinese production on the surface remains fairly robust, however demand is a different matter. The dichotomy between the two is likely to drive exports, assuming that export markets are willing and able to take them.
55% of industry minds believed rates would fall in the coming three months when asked in October 2022 and 40% expected further rises. Moderate and significant decreases in Ocean rates were the most common answer.
Source: Transport Intelligence