To read this content please select one of the options below:

Container shipping faces a normal down-cycle this year

Monday, January 9, 2023

Significance

Capacity will gradually increase as supply chain bottlenecks are resolved and new container vessels are delivered. The demand-supply imbalance will lead to significant overcapacity and sharply declining freight rates.

Impacts

  • Digitalisation initiatives will be ended if they do not deliver tangible business value; Maersk and IBM’s Tradelens project is an example.
  • Cancelled sailings will rise as demand and freight rates drop sharply, making it trickier for firms to maintain a stable supply chain.
  • Importers are switching to 'China+1' sourcing which will put pressure on supply chains across South-east Asia and the Indian subcontinent.
  • Container shipping lines will post record results for 2022 but could suffe losses in 2023 depending on the timing of the market rebound.
  • Weaker financial results for container shipping lines may cut merger and acquisition activity between shipping lines and logistics firms.

Related articles

Expert Briefings logo
Stay up to date
Sign up to the Expert Daily Briefings email alert and receive up-to-the-minute analysis of global events as they happen.
*If your university does not have access to Expert Briefings, visit our information page to find out more.