(www.MaritimeCyprus.com) The BIMCO Container Shipping Outlook and Market Overview for the Initial Quarter of 2024 is now available to the general public. An examination of the container shipping industry in terms of supply and demand is detailed in this report.
Container Shipping Market Overview & Outlook
Red Sea attacks temporarily increase demand for ships
Ship supply is expected to grow on average 9.1% in 2024 and 4.1% in 2025. Sailing speeds are expected to reduce in 2025 whereas congestion is assumed to remain stable. Rerouting via Cape of Good Hope is assumed to impact the first half of 2024.
Ship demand increases an estimated 9.5% in 2024 and falls 0.5% in 2025. The supply/demand balance is expected to tighten in the first half of 2024 but then weaken when ships can return to the Suez Canal routing.
Ship deliveries will hit a new record high in 2024, beating the record set in 2023. The fleet is expected to grow 14.9% between end 2023 and end 2025.
Despite a slight fall after the Chinese New Year, average freight rates for containers loading in China are currently 52% higher than they were in December 2023.
Bimco doubts whether freight rates will increase in line with cargo volumes strengthening in the second quarter, as the fleet is growing faster.
Once the Red Sea crisis has been resolved, freight rates should begin to fall in line with the weakening of the supply/demand balance. Time charter rates have increased 41% since December 2023 and average fixture periods have increased by 3 months.
The rates could stay high for a while as liner operators look to secure sufficient tonnage to maintain services despite the longer sailing distances. So far, second-hand prices have only increased marginally despite an increase in time charter rates normally being reflected in those prices.
BIMCO believes that this will continue to be the case, as liner operators can look forward to significant excess capacity once the crisis in the Red Sea has been resolved. That is because they prefer to cover increased demand by taking on time charter tonnage rather than buying second-hand tonnage.
For more details, you can view the complete BIMCO report, below:
Source: BIMCO
