by Lloyd's List
27 September 2024 (Lloyd's List) - THE Red Sea crisis remains the main driver of container shipping demand growth, with vessel capacity demand expected to increase three times faster than cargo volumes in 2024, according to BIMCO’s latest forecast.
Containership demand is expected to have increased by 15.5% in 2024, while container volume growth is forecast at between 4% and 5%.
BIMCO warns that should vessels return to the Suez Canal route, then demand for containership capacity will fall 5.5% in 2025, due to the reduced tonne-miles.
It forecasts slower cargo volume growth in 2025, compared to 2024, of between 3% and 4% in 2025.
Should vessels continue to avoid the Suez Canal, then BIMCO said containership demand is forecast to grow by 3.4%-4.5% versus 2024 levels.
“At present, we cannot judge which scenario is the more likely, but as the Israel/Gaza conflict has expanded to include Hezbollah in Lebanon, it does appear increasingly likely that rerouting may partly impact 2025,” BIMCO said.
Spot freight rates from Shanghai peaked in early July, but have since fallen more than 30% due to lower cargo volumes and an increase in capacity on some trade lanes.
BIMCO noted that in the 2010s, before Covid, the spot freight rate fell no more than 10% during the same period.
“An increase in the capacity deployed may partly explain the adverse development in some trade lanes, but we expect that this is mainly being caused by weaker volumes,” it said.
Average export freight rates from China peaked slightly later in July and fell only 15% since.
Time charter rates have barely reacted to the reduction in freight rates, since charter tonnage availability remains low. Most chartered boxships have either continued to be renewed or have had to find new time charter contracts at strong rate levels.
BIMCO said it expects rate falls and weaker time charter rates, particularly if ships returned to normal routes, in 2025.
“The stable time charter rates have supported equally stable prices for secondhand ships and their development should remain aligned when the forecasted weaker supply/demand balance begins to impact time charter rates negatively,” BIMCO said.
Ship supply was expected to grow an average 10.3% in 2024 and 6.3% in 2025. The global orderbook had increased 5% in the past three months, leading to further price rises for newbuilds.
“By the end of 2024, the fleet is expected to have grown to 30.6m teu, an increase of 9.3% compared to the end of 2023,” BIMCO said.
It forecast another 4.8% growth by the end of 2025, taking the fleet to 32m teu.
Deliveries were expected to hit a new record high this year but start to slow as early as next year.
