Container spot rates have fallen 70-80% since the beginning of the year but they remain nearly a third (32%) up on May 2019 pre-pandemic levels, points out BIMCO in a latest analysis.
The spot rate increase comes despite a worsening of the supply/demand balance. During the last four years, the container fleet has grown 16.9% in size and ended April 2023 at 26.2 million TEU, 3.8 million TEU larger than in April 2019, while Far East export volumes in Q1 2023 were only 2.1% higher than Q1 2019.
“The average sailing speed of container ships in April 2023 was 3.4% lower than in April 2019. This has limited the supply that the fleet can deliver. However, the total available fleet supply has still significantly outgrown Far East export volumes,” says Niels Rasmussen, Chief Shipping Analyst at BIMCO.
Despite this, the average spot rates for Shanghai exports and average rates for China exports remain significantly up vs. 2019. Recently, liner operators even appear to have been able to stem the freight rate slide and achieved some level of stability, he points out.
Idle ships currently add up to about 90,000 TEU more than four years ago, but this cannot explain the higher rates or how liner operators have been able to stabilise freight rates.
Despite overall supply/demand developments, liner operators must have become more efficient at matching capacity to cargo demand and/or a newfound freight rate discipline has emerged with each liner operator.
“No matter the underlying reason, we can conclude that despite a 70-80% fall in freight rates, and a worsening of the supply/demand balance, liner operators have so far been quite successful in keeping rates higher than pre-pandemic levels,” says Rasmussen.
