The recent wildly declining global ocean rates have impacted a number of new and smaller players in the liner shipping industry, as their current earnings are not sufficient to cover the sky-high charter rates they have committed to.
Allseas reportedly decided to cut capacity as freight volumes fell and Asia-Europe rates dropped 25% from May to an average of just around $7,700/teu.
In addition, the large number of new ships launched by shipping giants has exacerbated the gap between supply and demand. Kang Shuchun said, last year's abnormally high freight rates let many shipping companies earn a lot of money, some of the large shipping companies will profit into the new shipbuilding only, and in the epidemic before, the global shipping capacity has been higher than the volume.
The Wall Street Journal quoted energy and ship consulting firm Braemar, said the next two years will have a series of new ships launched, is expected to next year and 2024 fleet net growth rate of more than 9%, while the year-on-year growth rate of container cargo volume in 2023 will turn negative, which will make the global capacity and volume imbalance between the further intensification.
The Wall Street Journal believes that due to the many uncertainties in the international political and economic situation, shipping rates are likely to fall further in the remainder of this year and into next year. From the current global economic situation, shipping freight downward trend is certain, but to what extent and when the fall is difficult to conclude.
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