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Shipping Crisis? The Great Challenge?



















Experienced explosive high freight rates in 2021,
The freight rates for shipping entering the spiral downward channel in 2022,
in 2023 The direction of shipping development will face multiple crises and challenges.




Due to the pandemic, excess inventory and a decrease in global consumer disposable income have forced most    consumers to downgrade their consumption, resulting in    a decrease in demand for  freight volume. Despite the      continuous decline in shipping costs, the prospects for trade growth will be limited for at least the entire year  2023.


It is also due to the epidemic that the supply chain has  been disrupted and maritime transportation ports have been blocked. However, this situation has been alleviated, and the relief of supply chain congestion has increased effective transportation capacity by 19%,restoring the maritime market to a state of oversupply in 2023.


In the second half of 2022, the global epidemic gradually recovered, and spot sea freight rates significantly decreased, Currently, they are far below the contract freight rates, and according to data, there are signs of contract freight rates starting to decline.


The significant decrease in sea freight rates has led to a decrease in shipping company revenue. In order to save costs, shipping companies will appropriately reduce capacity and continuously strengthen revenue and expenditure management for offshore routes. The costs of these routes will exceed revenue, while the round-trip revenue of transatlantic routes will still exceed costs. Perhaps in 2023, shipping companies will increase investment in transatlantic routes.





Looking back from January to February 2023, the trend of sea freight prices remained basically stable, mainly influenced by the low demand for goods in the market and the off-season, resulting in relatively weak or even declining prices. Transportation is mainly based on long-term agreement contracts with guaranteed supply. At the same time, ship fuel prices have increased, transportation costs have increased, and most ship-owners have reduced their liners or suspended flights to reduce losses.

From late February to mid June, freight prices in the West and East of the United States continued to decline, due to the lack of significant improvement in market demand and sluggish U.S. imports and exports. Foreign commodity inventory is high, and terminal wait-and-see sentiment is relatively strong.

The only highlight of June was a brief rise in prices on the Middle East India Pakistan Line.

In July, as the third quarter entered, shipping companies launched a series of major moves, including four gold medal protection measures, the El Niño phenomenon to The Panama Canal drought, Global shipping companies reduced their holdings significantly, and cargo volume stabilized this season. Green shipping laws have fermented, and freight rates in the West and East of the United States have started to rise. As a global freight vane, we will wait and see the trend of ocean freight rates.

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