The global economy is currently facing a range of challenges, including geopolitical tensions, the energy crisis, rising inflation and interest rates, and a decline in consumer confidence.
These factors have contributed to a slowdown in global trade and investment, with unilateralism and protectionism on the rise.
While there has been some recovery in the services sector, overall trade growth is expected to remain weak. In this complex and challenging context, the expertise of skilled skippers is becoming increasingly important in navigating these turbulent waters.
Global container volume growth
Compared to 2022, almost every sea freight trade lane in 2023 shows a negative trend. Globally, after 7 months, the container volumes transported in 2023 are down by 8% compared to 2022 (January to July figures).
Concerning the three largest global trade lanes, Intra-Asia, Asia-North America, and Asia-Europe, they are down by 9%, 20%, and 4%, respectively.
If the decline continues for the rest of the year, 2023 demand could reach the same levels as 2019. However, it's worth noting that in the past, when down years occurred, the market quickly rebounded impressively.
Global Capacity Development
The current orderbook, which includes orders for new and more efficient container ships to be delivered in the next 36 months, stands at close to 8 million TEUs.
This represents almost 30% of the existing deployed fleet, meaning that the supply is expected to increase by another 30% in the next 2-3 years.
MSC, already the largest carrier globally, will further distance itself from its main competitors by adding 1.5 million TEUs of capacity, which is a 30% increase. CMA CGM is also set to become the number 2 carrier globally, surpassing Maersk, by adding 1.2 million TEUs of capacity, representing a 35% increase.
Overall Port Congestion
Kuehne+Nagel's Disruption Indicator reflects the daily fluctuation in port congestion at hot spot ports worldwide. The indicator measures port congestion in TEU waiting days by combining data on the number of vessels waiting, their TEU capacities, and the number of waiting days.
Port labour issues and bottlenecks are improving worldwide. The indicator for all hot spot ports has shown an upward trend in the third quarter. The indicator started at 2,550,438 TEU waiting days in early August and closed at 3,297,779 TEU waiting days by the end of October.
The indicator for the North American hot spot ports was relatively stable, as it started the quarter with approximately 822,769 TEU waiting days and reached 734,316 TEU waiting days on 31 October.
Growing risks and unknowns
With the world currently witnessing volatile and unstable geopolitical events, we cannot rule out potential risks that could impact the market.
Escalating consumer and energy prices and rising inflation could lead to labour disputes and strikes. Industrial action at ports, in particular, and by transport workers, in general, could have a significant impact on the movement of goods.
Industry experts fear that the situation in the Middle East region could lead to delays in the Suez Canal and the Strait of Hormuz. This could add to the consequences of the severe drought conditions seen at the moment in the Panama Canal and the Amazon River.
In addition, the costs associated with the EU Emission Trading System (ETS) for reducing greenhouse gas (GHG) emissions remain unpredictable.
Conclusion
The environment remains extremely volatile, fragile and complex and will require close monitoring and adaptation.
The global shipping market is still facing significant challenges and has not shown significant signs of recovery. Stagnation seems to be prevailing in the industry.
If the decline continues for the rest of the year, 2023 demand could reach the same levels as 2019. However, we must never underestimate the possibility of facing unpredictable events that could bring changes to the situation.
