Container shipping market faces growing uncertainty

Container shipping market faces growing uncertainty

With our comprehensive portfolio of international container shipping services for both LCL and FCL import and export cargoes, we not that the maritime consultancy, Drewry expects container throughput to decline significantly, whilst operational challenges are set to intensify in the global container shipping market.

Drewry urged shippers to brace for difficult months ahead as the global container shipping market faces escalating uncertainty that is greater than it was at the onset of the Covid virus.

It now expects a one percent decline in global container handling this year — comparable to the contraction experienced in 2020 at the height of the pandemic, which would mark only the third annual decline since Drewry began recording such data in 1979.

Drewry also said the situation is particularly grim in North America, where throughput is forecast to drop by 5.5 percent in 2025 - equivalent to around 4 million teu.

Meanwhile, container freight spot rates maintained their downward trajectory last week. Tariff uncertainty continued to plague the transpacific market. Demand elsewhere failed to match supply, although the rising number of blanked sailings appears to have limited the weekly decline in freight rates to single-digits.

In the week to April 24, the weighted average freight cost of a 40-foot container on major trans-ocean trading routes went down 1.6 percent to USD2,157, according to the Drewry World Container Index.

A new report by analyst Sea-Intelligence also touches on this. It notes reductions in schedule capacity over the last few weeks for both the Asia-North America West Coast route, at around 12 percent.

The Asia-North America East Coast route has experienced an even more pronounced decline with a 14% decrease.

The dramatic increase in blank sailings is in response to the tariffs that sent China exports plunging.

The trans-Atlantic trade has not experienced similar fluctuations. Capacity on this route has remained largely stable. Most likely due to the announcement of a 90-day tariff pause by both the Trump administration and the EU.

More detailed information on the above can be seen in the following links.

https://www.clecat.org/en/news/newsletters/drewry-container-shipping-outlook

https://www.freightwaves.com/news/trans-pacific-blank-sailings-soar-as-ocean-shipments-plunge?oly_enc_id=2359H2956723J0G

https://gcaptain.com/surge-in-blank-sailings-hits-transpacific-routes-amid-us-china-trade-tensions/?subscriber=true&goal=0_f50174ef03-f29bcc8f77-139916333&mc_cid=f29bcc8f77&mc_eid=ddba757d70

https://www.hellenicshippingnews.com/drewry-world-container-index-down-2-last-week-4/

Whatever happens to the container shipping market, Davies Turner will remain committed to helping clients manage any difficult situations 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 issues affecting specific movements.

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