Freight News, Sea

Freight rates on downward track, says Ti

[ November 22, 2022   //   ]

Falling demand, decreased congestion and an in increase in capacity are driving down freight rates in the final quarter of 2022 says analyst Ti  in its Ocean Freight Rate Tracker white paper for the fourth quarter of 2022.

The latest report which provides insight into spot market demand, shipping supply side, ship building and freight rates, says also that Maersk, which controls approximately 16% of the market, has increased the proportion of contracts in its service mix from 61% in 2020 to 71% at present. This has resulted in a 41.7% increase in freight rates.

Between the fourth quarter of 2021 and the second quarter of 2022 rates were roughly eight times those seen in Q2 2021 bt towards the end of Q2 2022 the market changed, with a marked fall in rates.

The number of container vessels ordered has leapt up, with the tonnage on order increasing by at least 100% in 2021 as compared to 2019.

Transpacific remains the most prominent trade at the global level in terms of determining overall market conditions. This is due to the US and to a lesser extent China being trade destinations that shape world trade at present.

Transpacific is no longer as Chinese as it was 3-4 years ago. Vietnam in particular is more important, and growing in importance.

Energy prices in many European economies are meanwhile leading to structural change, with longer-term implications for the container shipping market. The implications for German industry are particularly serious, says Ti.

Chinese production remains fairly robust, but the question now is whether it can find sufficient export markets.