Container shipping rates could culminate their abrupt fall in early 2023
From Hapag-Lloyd they added that the transition to a less profitable period will be smoother than in other recessions.
Container shipping rates could end their steep decline early next year and the sector’s move into a less profitable period will likely be a «softer landing» than in previous recessions, the CEO of the fifth-biggest shipping line said. of the world, Rolf Habben, reported Bloomberg.
Habben Jansen, referring to the drop in freight rates, indicated that «I hope that some of them will go up again, because they are currently well below their cost.»
That rebound may be close. The latest spot rate for shipping 40-foot containers between Hong Kong and Los Angeles stood at $1,400 this week, ending a seven-week decline, according to Drewry. This is well below the more than $8,500 a year ago and the average of about $1,500 over the five years prior to the pandemic.
Habben Jansen declined to say when he thought the bottom would be reached, but said longer term the company «will not sail if we can’t make money on the rates we’re getting.»
Small uptick
«Personally, I wouldn’t be surprised if we see a small spike here and there, even before Chinese New Year (end of January),» he said. «It will happen sometime during 2023, whether it’s going to be directly after Chinese New Year or just as we get into the peak season, I think that remains to be seen,» he added.
Maersk’s newly appointed CEO, who will take up his role in January, was cautiously optimistic earlier this week that the US economic downturn will not last long. «We are seeing core consumption that is still quite strong,» said Vincent Clerc, «we can still be optimistic that if there is a recession, it should be quite short,» he added.
Meanwhile, some of the country’s largest ports have reported their November activity, and it looks smoother from coast to coast:
Los Angeles: Full containers unloaded in November decreased by 24% compared to the previous year; total volume so far this year is down 7% from last year’s record.
Long Beach: Full containers landed last month fell 28% from November 2021; total volume so far this year has fallen by 0.5%.
Savannah: Full containers landed in November decreased by 7.6% compared to the previous year; global volume so far this year is up about 6%.
The good news is that weaker volumes are shortening shipping times from Asia to the United States and Europe that topped 110 days earlier this year, according to a Flexport webinar this week, where sentiment was mixed on the prospects for 2023.
«I might hang out with naysayers and people who think the end of the world is coming,» said Ryan Petersen, Flexport’s co-CEO. «Everyone I know is sure a recession is coming, but consumption looks very strong.»
For Hapag-Lloyd’s Habben Jansen, the move to a more normal balance between supply and demand means «for sure, profits will drop very significantly and normalize.»
The sector has always been cyclical, he added, but it is too early to tell how sharp the next correction will be. «I think there are a number of mitigating factors this time compared to what we saw in 2009 that will ensure that we probably have a somewhat softer landing than we’ve had before,» Habben Jansen said.
By MundoMaritimo
