The 2023 shipping market outlook for the container sector is expected to struggle with overcapacity, according to Maritime Strategies International (MSI) analyst Daniel Richards. He predicts that the balance between demand and supply in 2024 will be among the worst seen in recent decades, with supply growth outpacing demand. Despite a slight contraction in demand last year, MSI expects a 4% growth in 2024, while supply growth is projected to be over 7%.
In terms of newbuilding orders, 1.9 million teu of new capacity was ordered last year, with some carriers beginning to place orders for alternatively fueled vessels. Richards also discusses the impact of the Red Sea security situation, with carriers announcing pauses in transit through the Red Sea. Additionally, he mentions that while there have been some service diversions by container lines due to restrictions in the Panama Canal, the global aggregate impact does not seem significant.
Regarding container freight rates, spot freight rates were down to levels at the eve of the pandemic, while broader average freight rates sat slightly above the period prior to the pandemic. Richards expects a similar picture for next year, with the possibility of temporary spikes in short-term freight rates due to the situation in the Red Sea, but not affecting all trades or rates tied to carrier volumes moved under contract.
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