SIMIC

A KEY South Korean shipping researcher has predicted that container freight rates this year will be determined by how liner operators control shipping supply, rather than actual cargo demand.
Korea Maritime Institute (KMI) shipping research director Ko Byung-woo told the recent 2023 Oceans and Fisheries Outlook conference that shipping lines had concurred that stabilizing freight levels, rather than raising market share, would maximize profits, reports London's Loadstar.
He said: "The fight for market share hurt the container shipping market, but today, following consolidation, the liner industry is more oligopolistic, where a few companies exert significant control over a market, enabling their joint actions to control the supply of ships. We are, therefore, sceptical about a nosedive in freight rates."
Indeed, Sea-Intelligence's latest report showed liner operators cut capacity by 18 per cent in the lead-up to the Chinese New Year holiday. Sea-Intelligence estimates that the percentage of blanked Asia-US west coast sailings increased to 36 per cent, compared with 7.6 per cent before last year's lunar holiday. There was a similar trend on Asia-US east coast and Asia-North Europe services, with capacity deployment decreasing 11 per cent and 6 per cent, respectively, bringing slot supplies in both lanes closer to the pre-pandemic baseline.
Mr Ko predicted the increase in global container traffic would rise by an annual average of 3 per cent up to 2030. This is below the 3.6 per cent growth seen between 2010 and 2022, which meant container shipping demand would slow over the long term, he said.
This year, however, owing to Russia's invasion of Ukraine and inflation, KMI expects global container traffic to grow just 2 per cent, with volumes on Pacific and Asia-Europe routes declining 0.3 per cent and 2 per cent, respectively, while intra-Asia routes continue to look positive, with an estimated growth of 4.4 per cent.