Shipping companies are competing to cut costs, impacting their profitability

Carriers are contributing to a “race to the bottom” in the shipping industry, which could lead to a “catastrophic situation” in 2024. Maersk, in particular, has been singled out as a major offender. The airline’s CEO, Vincent Clerc, warned investors that the coming year would be challenging for the shipping industry without a rebound in the spot market in the last three months. However, his comments were met with criticism, with one industry expert describing them as “weird”.

Maersk has been offering rates as low as US$500 per teu and US$800 per feu, which has contributed to the race to the bottom. When asked about their role in driving down rates, Maersk declined to comment. However, sources claim that this behavior is not unique to Maersk, and “they’re all at it.” Freight forwarders and carriers have been engaging in a race to the bottom by accepting and offering low rates, in a bid to compete for customer tenders and secure volumes.

Looking ahead, carriers and shippers anticipate very challenging times in 12 to 18 months, with an influx of new ships and tonnage coming to the market. This situation has been a key point of discussion in executive meetings for all carriers, with the industry expecting a major problem in 2023/2024.

Source .