Demand is down! Shut down and slow down routes!
Weak global demand and falling freight rates have caused major shipping companies to close routes and suspend services. Maersk pointed out that the shipping market is under great pressure as inflation pressures and higher energy costs weigh on market sentiment and a sharp slowdown in Western economies has led to an increasingly pessimistic economic outlook. Recent data shows that regional container growth has declined in most major regions, while freight rates have slipped.
Maersk CEO Søren Skou is not worried about the overall performance and performance of this year, despite falling demand and a slump in container spot rates in recent weeks. Søren Skou believes that Maersk has a higher proportion of long-term contract business than other carrier companies, and has more land transportation business to offset the impact of freight market fluctuations. Port conditions have not yet “normalized”, but are clearly improving.
Hot Topic
China National Day Golden Week: Considering the Golden Week holidays and ship delays from October 1st to 7th, there will be adjustments including suspension of sailings and port jumps in Asia, the Mediterranean, Europe, and the trans-Pacific region, which will affect some of Maersk’s services until mid-October.
UK port strikes: Strikes at Felixstowe and Liverpool have and will continue to have a major impact. Liverpool’s strike runs from September 27 to October 3, with another strike planned for the 11th. Maersk has advanced or delayed the arrival of 12 Asia-Europe sailings to minimize the impact of the strike.
Congestion at European ports: Congestion at major European ports is continuing to improve and operational efficiency is picking up, but delays and other conditions are expected to continue in the coming months.
Current Situation and Prospects of Major Routes
Asia – Nordic: Demand will come down, especially during the Golden Week. Recent economic data suggest that the recession is starting to spread across Europe. When winter is approaching, the Russian-Ukrainian conflict may lead to the further deterioration of the energy crisis in Europe, and the future economic situation is not optimistic.
Asia – Mediterranean: The supply-demand relationship is not good, demand is falling, and shipment market booking prices continue to adjust. It is expected that the next 4 weeks will continue to adjust the schedule to restore its reliability of the schedule.
Asia – North America: Overall, North American port conditions are improving, but capacity losses are still expected in the coming weeks due to shipment adjustments due to previous port congestion.
Asia – Latin America: After the peak season of traditional transportation, demand is falling, transportation demand is hovering at a low level, and the overall container space is sufficient. The market freight rate is in a downward trend due to a lack of support.
Asia – Central and Western Asia: Affected by the inflation and economic situation in the destination market, the overall demand is weakening, the container volume performance is still weak, and the booking price continues to fall, but the decline has begun to slow down.
Asia – Africa: Destination demand is expected to be flat due to high inflation and foreign exchange controls. Short-term freight rates in the market are under pressure.
Asia – Oceania: Overall, import demand in Australia is slowing, while demand in New Zealand remains stable. New Zealand ports remain congested and delays continue.
Freight rates have already started to fall this year, despite continued congestion at ports and supply chains. The Russian-Ukrainian conflict undermined consumer confidence and U.S. consumers bought less. Trade is expected to pick up “moderately” this Christmas, with shipment volumes flat or slightly down, but freight rates are still well above pre-Covid-19 levels among concerns about a slowdown in the global economy and consumer demand.
