Container xChange’s “Market Forecaster” report noted a downturn in demand for retail orders, shipping containers, and ship sailings due to significant inventories of goods which are in storage. Consequently, storage depots will be pressured to hold surplus containers into 2023 before a demand recovery in the long-term.
Container xChange warned that container owners will likely face hikes in container storage fees to disincentivize longer stays at the depots. Christian Roeloffs, cofounder and CEO of Container xChange, noted a lack of depot space to accommodate all the containers.
“With the further release of container inventory into the market (e.g., from the disposal of leasing fleets), there will be added pressure on depots in the coming months. This will be a key challenge for some and a competitive advantage for others in the business, especially in China because of the empty container repositioning there,” Roeloffs said.
Retailers and companies have become more cautious in their stock management strategy with shorter cargo delivery cycles, Container xChange’s cofounder and CEO Johannes Schlingmeier said in a release. As inventories run low in North America and Europe, companies will reorder and increase demand for shipping capacity again.
“This won't go back to max pandemic levels but certainly be back to the long-term average upward trend. What has happened now is that the cargo is "on time" again and hence you'll see a slowdown in new ordering as companies adjust to this more efficient turnaround times in ocean freight delivery,” Schlingmeier said.
Source: DC Velocity
Some carriers are predicting the IMO’s new carbon intensity indicator (CII) will result in a 10% decrease in effective container vessel capacity. MSC stated it would “force some less efficient ships to reduce sailings speed in order to remain compliant.”
According to Alphaliner, the impact of CII would depend on a carriers’ fleet, vessel size and age, sailing speeds, and routes served. The analyst believes that some carriers’ predictions of capacity effects in excess of negative 10% are “overblown”. “The real fallout will likely be smaller, and it will only ’creep’ into the maritime transport chain, rather than materialize overnight in 2023,” Alphaliner noted in a recent newsletter.
The analyst explained that any capacity reduction from CII-related slow steaming or vessel decommissioning will be offset by newbuildings scheduled to enter the liner market which would bring up a large amount of capacity. The global container ship orderbook stands at almost 7.5 Mteu of capacity or just under 30% of the existing world fleet. 2.52 Mteu of capacity will be delivered in 2023 and 2.85 Mteu in 2024 (see Figure 1).
The CII is due to come into effect on January 1, 2023.
Source: Alphaliner
Head-haul and regional export volumes have declined into all import regions except the Far East according to BIMCO. Overall, volumes were -9.3% lower year-on-year (y/y) in September 2022, according to Container Trade Statistics data.
BIMCO said a head-haul trade is defined as the direction of an interregional trade with the highest volume, such asfrom Far East to North America. Regional trade is an intraregional trade such as within Asia. Head-haul trades dropped -15.5% and regional trades fell by -0.7%. North America inbound volumes recorded the greatest loss at -20.6% y/y (see Figure 1).
Trans-Pacific Eastbound volumes were down by -24.5% y/y, accounting for nearly 50% of the total drop in head-haul and regional volumes compared to 2021. In 2021, September volumes grew 27.4% on 2019 but are now -3.8% lower, BIMCO reported.
The data revealed 20 out of 28 region-to-region trades showed negative growth with September volumes around 1.1 million TEU lower than a year ago. Out of the top 10 region-to-region trades which cover nearly 90% of all volumes, the trades into Europe performed the worst compared to 2019. The Far East-Europe trade was down -18.8% while the Intra Europe trade declined -11.5%. BIMCO expects remaining congestion issues to be resolved in light of the lowered volumes to North America and Europe.
Source: BIMCO
Sea-Intelligence which revisited data from week 42 in the blank sailings assessment, found ocean carriers had introduced extra blank sailings in the past 2 weeks (as of week 44), for the period from week 42-52.
The number of blank sailings significantly increased on the Trans-Pacific with 34 additional blank sailings on Asia-North America West Coast, and 16 on Asia-North America East Coast. Carriers announced an extra 7-11 blank sailings in all but 5 weeks of the analyzed period, the data showed.
Trans-Pacific Eastbound volumes were down by -24.5% y/y, accounting for nearly 50% of the total drop in head-haul and regional volumes compared to 2021. In 2021, September volumes grew 27.4% on 2019 but are now -3.8% lower, BIMCO reported.
The data revealed 20 out of 28 region-to-region trades showed negative growth with September volumes around 1.1 million TEU lower than a year ago. Out of the top 10 region-to-region trades which cover nearly 90% of all volumes, the trades into Europe performed the worst compared to 2019. The Far East-Europe trade was down -18.8% while the Intra Europe trade declined -11.5%. BIMCO expects remaining congestion issues to be resolved in light of the lowered volumes to North America and Europe.
Source: BIMCO
The U.S. export market is facing a slowdown as canceled sailings rise from Asia to the U.S. The Port of Savannah and Port of Long Beach are seeing the sharpest increase in shipping container delays. The Port of Long Beach told CNBC as much as 15% of its export capacity is tied to cancelled vessels in Q4, and according to data from Sea-Intelligence, there are more unannounced cancellations coming.
An increase in blanked, or canceled sailings, from Asia bound for the U.S. is hitting some of the biggest domestic ports hard, including the Port of Long Beach and Port of Savannah. This has limited their ability to ship exports. The reduction of vessels coming from Asia on the Trans-Pacific route is resulting in increased wait and dwell times of export containers at the Port of Long Beach.
“We are projecting 28 blank sailings for Q4, which represents approximately 15% of our quarterly vessel capacity,” said Mario Cordero, executive director of the Port of Long Beach. “As shipping lines reduce their vessel calls in the form of blank sailings, this reduces the capacity for outbound volumes. That said, we continue to prioritize exports over empties, which is one reason empties are ticking up on terminal.”
Cordero said that the port anticipates loaded imports to continue to taper off for the rest of the calendar year.
Source: CNBC
