18 July 2023 (Lloyd's List) - FREIGHT forwarders are holding out for stronger demand in the peak season, despite a majority noting a business slowdown in the second quarter of 2023.

A survey of 900 forwarders conducted by container logistics platform Container xChange found that nearly two-thirds of forwarders said that business had slowed down in the second quarter compared with the first quarter of the year.

“This indicates there has been a degrowth in container demand in the second quarter,” Container xChange said.

Nevertheless, those surveyed were hopeful of a return to positive territory in the third quarter.

“Demand is set to increase in the third quarter, but will be considerably lower than the last three years,” Container xChange said.

“The reason for the demand growth, albeit subdued, will be the cyclical nature of the shipping industry.”

It warned, however, that due to the reduced purchasing power of consumers in the US and European Union, demand would be considerably lower compared with last year, but better than the first half of 2023.

“The year 2023 started with significant oversupply of containers and high uncertainty in the market, which led to substantial rate erosion,” said chief executive Christian Roeloffs.

“The average container price has been free-falling and there are no signs of revival as we approach the busiest period in the shipping industry. It is quite evident that the peak season is almost invisible.”

Another indicator of subdued expectations from the coming peak season was that the majority of freight forwarders confirmed that they had experienced a decrease in customer demand and customer activity in June, Container xChange said.

“As the world looks up to America for consumer demand, amidst rising prices, inflation and wage wars, the average container price indicates no sign of revival,” Container xChange said.

“This in turn leads us to think that the demand for cargo or the need to reposition empties back to Asia is no longer pressing in that region.”

Meanwhile China, the most important destination for the westbound trade, also provided no clear signal of demand revival for containers.