As the 4th quarter begins a pall has settled over the container shipping market. The rate bump seen in August on the back of extensive carrier blank sailings, and prior to that in May, is now in retreat ahead of the traditional post-peak season lull, a surge in new capacity and doubts as to when or if a volume recovery will materialize in 2024. Spot rates in the eastbound trans-Pacific to the West Coast since late August are down nearly 20% and to the East Coast are down more than 30%. Asia to Europe spot rates are down by half since early August.
For ocean carriers efforts over the past year to stabilize the market through extensive blank sailings have disrupted customers’ supply chains but largely failed to prevent further rate erosion. But carriers in the eastbound trans-Pacific say capacity reductions are likely to continue into 2024 given that US imports from Asia are expected to remain muted through the Lunar New Year in February, and possibly beyond.
But as carriers determine their 2024 network deployments, big questions remain: how much capacity should be deployed given doubts a recovery will materialize next year? And to what degree should they opt to minimize blank sailings, thereby offering more a consistent product but likely needing to be aggressive on pricing to fill the capacity they are leaving in the market?
The way the market is beginning to shape up will make for another set of unique market circumstances as TPM comes together next March.
Join us in Long Beach to experience a first-hand connection to the beating heart of the market through a curated, editorially independent program and extensive networking with industry peers and senior executives from across the industry. Advanced rates are available for a limited time only; sign up now and take advantage of discounted rates.