In the previous market update, we mentioned that several shippers are looking to increase their rates. But after these reports, they have not succeeded to get this done. In this market update, you will read more about this and also about an important underlying problem.
In addition, difficulties remain in the Panama Canal.
Download our Market Update to discover the details of these subjects!
CAROZ’s eye opener:
The gap between promised and actual rate increases in container shipping is a big problem, according to reports from Drewry and Freightos. Even though there was a small increase in rates from October, they’re still lower than expected, making it tough for shipping companies to make the profit they hoped for. Leaders like Maersk’s CEO, Vincent Clerc, and Hapag-Lloyd’s Rolf Habben Jansen are warning of a possible “price war,” showing the pressure on container rates due to overcapacity from too many new ships and not scrapping enough old ones.
This imbalance is a challenge because it leads to both an older fleet and continuous growth in capacity, expected to be 9% in 2024. This situation puts downward pressure on rates, affecting the earnings of container shipping companies.
Braemer also points out that about 560 container ships are old enough to be scrapped, but owners are hesitating to retire them. The industry seems stuck, dealing with past changes in demand and not wanting to let go of older ships. To survive these challenges, the industry needs to find ways to manage its fleet better and deal with the issue of too many ships.
Want to know more?
Each monthly update we will highlight the developments within the Ocean freight market including the following topics:
- Trending topic: Rates don’t want to go up
- Rail & Air | Asia – Europe
- Space & rate developments
- Port developments & congestion
- Freight Indices & Container Availability
- How to mitigate risks
