We are almost at the end of the year 2023. A year with sustainability as one of the main topics, different strikes around the world, exceptional low rates and much more.
Rates, one of the topics we will discuss in this Market Update. Are they going up in 2024?
Read all bout it in this, bigger than normal, Market Update where we are going to look forward to 2024 and what we can expect!
CAROZ’s eye opener:
We find the proposed significant rate increases by leading container shipping companies like CMA CGM and Hapag-Lloyd on the Asia-Northern Europe route to be a good development. The doubling of spot rates, especially for Freight of All Kinds (FAK), as planned by CMA CGM, is a substantial shift that will undoubtedly impact the cost structure for companies involved in international trade. But it is not sustainable that these low rates hold on forever.
The anticipated rate hikes, effective from January 1, 2024, pose a considerable financial burden on shippers operating in the specified regions. Our focus is on optimizing logistics costs for our clients, and these rate increases necessitate a revaluation of shipping strategies and cost projections. We foresee the need for strategic adjustments to mitigate the financial impact and maintain cost-efficient supply chain operations.
Simultaneously, the insights provided on capacity and fleet growth indicate a challenging landscape for the shipping industry. The continued growth of the ocean liner fleet in 2023, outpacing the demand for shipping containers, is a trend that raises concerns for 2024. We acknowledge the industry’s options to manage this growth, including the potential removal of older ships and other operational adjustments.
The discussion on consumer spending and its link to shipping patterns is insightful. Understanding the economic factors influencing shipping demand is crucial for effective supply chain management. The anticipation of a moderate growth of 2-3% in container shipping demand for 2024 aligns with our expectation of a cautious economic environment, considering rising inflation and its impact on consumer behaviour.
The integration of climate considerations and the EU Emissions Trading Scheme (EU ETS) into the shipping landscape adds another layer of complexity. The impending carbon taxes and surcharges, particularly within the EU, necessitate a strategic approach to minimize environmental impact while managing additional costs. The potential shifts in behaviour among carriers and shippers in response to these new considerations, such as a preference for hinterland transport, are aspects we will closely monitor.
In conclusion, the shipping industry’s evolving landscape in 2024 requires watchful adaptation and strategic planning. We remain committed to navigating these challenges alongside our clients, ensuring optimized logistics operations and cost-effective supply chain management.
Want to know more?
Each monthly update we will highlight the developments within the Ocean freight market including the following topics:
- Trending topic: Expectations into 2024
- Rail & Air | Expectations into 2024
- Space & rate developments
- Port developments & congestion
- Schedule reliability
- TEU per operator
- How to mitigate the risks