Container shipping will face demand-supply challenges

Date Added: 2 April 2024

With a comprehensive network of international container shipping services, including LCL and FCL import and export operations, Davies Turner notes that Clarksons’ latest container shipping report said that once the Red Sea disruption has been resolved, weak “underlying” supply-demand fundamentals will materialise, leading to the sort of the challenges for container shipping lines that were seen after the Covid-19-fuelled boom.

The world's largest shipbroker estimates containership fleet growth of 9% this year, outpacing demand growth of approximately 4%.

Clarksons also noted that to manage the tonnage shortage due to the longer voyage times round the Cape of Good Hope, operators have been running vessels at higher speeds. Operating speeds averaged 14 knots in late March, up 1% from the 2023 average.

In February, 18 container ships with a total capacity of 145,000 teu were delivered, bringing year-to-date deliveries to 67 units, with a total capacity of 449,000 teu, a record for deliveries in capacity terms. Deliveries in 2024 are currently projected to reach 2.7 million teu total capacity, an all-time record, while a further 2 million teu of capacity is scheduled for delivery in 2025 and 2026 – both double the 2019-2022 average.

Should the Red Sea crisis fade away, 2025 will be a challenging year, Clarksons predicts, as the fleet is expected to grow by more than 5%, despite more potential for vessel demolitions.

The shipbroker adds, however, that stricter environmental regulations mean that operators will have to resume slow-steaming once Suez Canal crossings resume. The supply-demand gap could also be narrowed as demand growth is forecast at 3% in 2025.

Davies Turner remains committed to helping clients manage the difficult situation facing container shipping at present and mitigate where possible additional costs incurred. Our ocean freight team will endeavour to keep in close contact with all clients to provide updates on specific movements.

For more information about Davies Turner’s ocean freight forwarding and logistics services, please contact ocean@daviesturner.co.uk or visit the relevant pages of this website.


 

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