Xeneta：Experts see an inevitable negative impact on rates in 2023 amidst weak demand

After more than two years of rising rates and overstretched capacity, the rapidly cooling seaborn market is gearing up for an "extremely challenging 2023", according to Oslo-based Xeneta. The operator of a market intelligence platform has forecast a sharp drop in sea freight rates as cargo volumes continue to fall, prompting carriers to increasingly idle their fleets after putting all available ships and containers into service in two years' time.

Xeneta highlighted that, having climbed to historic highs during the global pandemic, sea freight rates have fallen dramatically since the summer - even more so in terms of spot prices. Using crowdsourced data from the world's leading shippers, their analysts predict this trend will continue in 2023, leading to a further 2.5 per cent decline in container volumes.

A continued decline in production would create an "imbalance" in the market. This, Xeneta predicts, will lead to further overcapacity and lower utilization. They noted that the new ships could add 1.65 million TEUs of capacity, which would only be partially offset by the demolition of the old ships. Xeneta expects capacity to grow by nearly 6% (5.9%), noting that "even if demolitions double from our current projected levels, the industry will still grow by nearly 5%."

Berglund expects shippers to continue to struggle with overcapacity as traffic declines further in 2023, with up to 1 million TEUs or "even more" expected to sit idle. That said, he noted that the combination of lower production and excess capacity will continue to negatively impact rates through 2023 as new tonnage enters the market.

Berglund concluded that 2023 will be a challenging year for shippers and carriers alike. Negotiations to renew long-term contracts will be complicated as shippers plan to reduce volume and carriers will seek to maximize volume. The market will be further complicated by economic uncertainty, geopolitical concerns (" not just related to Ukraine "), continued industrial action along the logistics chain, China's ongoing zero COVID-19 policy, as well as weak demand, easing congestion and increased freight capacity.

Shenzhen Xunlaitong specializes in shipping export from Shenzhen to Australia & New Zealand, Germany, Netherlands and more business

www.weitaianquan.com.cn