• TPM24
  • March 3-6, 2024 | Long Beach Convention Center
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TPM24 Theme: Extreme normalization fallout

As violently as the market seized up during the COVID-19 pandemic, the “extreme normalization” of 2023, coined by Maersk CEO Vincent Clerc in May, is now the market reality. With few signs of a peak season rebound as of early July, this could well be the state of the market into next year. The implications ahead of TPM24 are substantial.

For shippers, it means adjusting, yet again, to a shockingly altered landscape characterized by short-term priorities aimed at capturing all the savings a weak freight rate market has to offer, in the process turning to NVOs, who are thus capturing a growing share of US imports. Longer term, those priorities involve often-riskier moves, such as, ironically, trying to de-risk supply chains by diversifying their sourcing.

Assumptions that prevailed during the 2020-2022 COVID outbreak, including the idea that rate levels would never again return to pre-COVID levels, proved fleeting. Not only did rates return to levels that left ocean carriers barely profitable as an industry over many years, but those carriers now are staring at systemic overcapacity that could last two to three years. Given the current bloated orderbook, cellular containership fleet growth will exceed that of world port volumes through 2026, according to Drewry.

That would be less impactful if ocean carriers were able to effectively flex capacity, but that ability has been illusive since rates started to tumble last year. Through the first half of 2023, ship demolitions, super-slow steaming and blank sailings have proved inadequate to the task of stabilizing the market. Carriers, which in the run-up to COVID and in the early days of the pandemic had showed signs of mastering the art of managed capacity withdrawals, were incapable of adjusting in step with market weakening.

Unless carriers reverse course and adjust boldly and quickly to new realities, the market is in for a rough patch, at least for carrier financials. In the face of tepid demand, carriers are scheduled to introduce a slew of new capacity beginning this year — new container ship deliveries in June were 277,873 TEU, according to Linerlytica, a record high amount of new vessel capacity delivered in a single month — meaning the mountain for carriers to climb to restore a measure of market equilibrium has grown steeper.

“The currently scheduled sailings by the carriers in the three major east-west trades point to major over-capacity issues. The choice is between a sharp drop in already low freight rates or large-scale blank sailings,” SeaIntelligence wrote in early July. “Will the market crash this peak season? The carriers get to choose this one.”

But that hasn’t happened yet. The blank sailings experienced in the run-up and in the early days of the pandemic has failed to gain momentum. What has surfaced is an odd sense of a déjà vu, including a number of general rate increases imposed despite unsupportable market fundamentals. Maersk imposed a 44% GRI from Asia to the UK as of July 31. Like earlier days, carriers also have grown accustomed to calling rate levels “unsustainable,” especially in light of stubborn cost increases experienced during the pandemic, harking back to earlier days when such talk was commonplace.

But it never did any good. While carriers historically saw brief periods of market tightness and then hit the jackpot during COVID, the underlying core fundamentals of container shipping didn’t change. And yet that didn’t prevent carriers from engaging in frenzy of vessel ordering, driving the order book as a percentage of the existing fleet to more than 30%. That some carriers are changing course by investing in terminals and logistics services, which have enjoyed higher historic returns than core container shipping, shows how the industry and provider business models will look different in the future.

All of this underpins the core of TPM24, where an extensive program of keynotes, fireside chats, panels, TED-style talks, shipper case studies, and the TPM Academy, will anchor shippers and other participants in the realities of the where the market is as of early 2024 and illuminate where it's headed during the balance of the year and further into the future.

TPM Tracks and Sessions*

Confirmed Sessions

  • The Global Economic Outlook From S&P Global 
  • Scanning the Horizon: The 2024 Container Shipping Outlook
  • After the Diversions: Will West Coast Ports Regain Market Share? 
  • The Last Word: Lars Jensen and His Unique Perspective 
  • Beyond the Trans-Pacific: The Evolving Trans-Atlantic, North-South, and Intra-Asia Trades

Tracks and Topics:

  • TPM Academy: 15 New Learning Modules (link to TPM Academy page) 
  • TPMTech: A New, Integrated Experience (link to TPMTech page) 
  • Plugging It In: Understanding the Reefer Market Ahead (link to TPM Cold Chain page) 
  • TPM CEO Series: Keynote-Level One-on-Ones and Fireside Chats 
  • TPM Accelerator: TED-Style Talks From Industry Disruptors 
  • Case Studies: Industry Solutions From the BCO Perspective 
  • The Landside View: Intermodal Rail and Trucking 
  • The Global Regulatory Landscape 
  • Decarbonization and Sustainability 
  • Geopolitics and Supply Chain: Adjusting to a New World Order 

*Subject to Change; watch for the release of the initial full agenda in late August