The signals have been quite positive within the container shipping sector of late; spot rates are up, charter rates and durations are up, second-hand ship sales are brisk and asset prices are rising and idled tonnage is down. However, leading container shipping consultancy Drewry is warning that these signals won’t be flashing green much longer.
“We would be confident if the foundations for recovery were in place but we just don’t see them,” said Simon Heaney, editor of Drewry’s “Container Forecaster” report, during a presentation on his company’s latest sector outlook. “Without those building blocks in place, we view the uptick in spot rates and charter-hire prices as a transitory illusion. Volumes remain very weak. The orderbook for this year and next is vast and will start to land with more vengeance very soon,” he said. “The bill is due on the ordering frenzy we saw in 2021. The timing [of deliveries] couldn’t be much worse, coinciding with a slump in volume.”
“And as the newbuilds flood in, pressure on both markets [freight and chartering] is going to become an irresistible force that owners and operators are not going to be able to bat away.”
In terms of freight costs. Drewry is now predicting low rates through 2024.
Source: freightwaves.com