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August 28 2023

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August 28, 2023 | Journal of Commerce 13 Special Report Container Shipping Quarterly Honolulu-based carrier presented a relatively bullish outlook for the Asia–US trade in an Aug. 1 earnings call. Despite expectations for a "muted peak season," Matson pre- dicts its China services will be "in solid demand, with our vessels near full" during the traditional summer- fall peak season. "Absent an economic hard land- ing in the US, we continue to expect trade dynamics to gradually improve for the remainder of the year as the trans-Pacific marketplace transitions to a more normalized level of con- sumer demand and retail inventory stocking levels," Matson Chairman and CEO Matt Cox told analysts. JOC email: Average spot rates from Asia to the US West Coast of $2,362 per FEU have climbed 49.4% since hit- ting a low of $1,581 per FEU at the end of June, according to Drewry's World Container Index. "Whether the increases hold in an atmosphere of weak fundamentals remains to be seen; they certainly haven't done so earlier this year, but then, we haven't seen climbs as pro- nounced as this either," Peter Sand, chief shipping analyst at Xeneta, noted in a mid-August update. "Has the market bottomed out before a rebound? Or is this simply a false dawn for carriers? Time, and analysis of the latest data, will tell." There was no sign of a false dawn on the trans-Pacific for Matson. The Global containerized trade vol- umes totalled 84.3 million TEUs in the first half of 2023, a 4.3% year- over-year drop but a 0.2% increase from the first half of 2019, according to the latest available data from Con- tainer Trade Statistics (CTS). "Some of the numbers are spec- tacular, but it is mostly restoring demand to normal levels on the trade after the last two years," Nigel Pusey, CEO of CTS, told the Journal of Commerce mid-August. Carriers will have been buoyed by recent rate developments on the crucial corridors between Asia and North Europe and the Mediter- ranean and Asia and the US West Coast, where general rate increases have so far been successful in raising average spot market pricing. The Asia–North Europe trade lane saw the most dramatic spike in short-term rates; an Aug. 1 freight all kinds increase pushed spot pricing that had been hover- ing below $1,500 per FEU since early May up 39.2% to $1,736 per FEU in a span of just two weeks, according to data from rate bench- marking platform Xeneta. "Some of the numbers are spectacular, but it is mostly restoring demand to normal levels." Container fleet to absorb 7.3 million TEUs of capacity by 2025 Top 10 carriers' container ship fleet and newbuild capacity on order, in TEUs, with percentage of capacity on order to existing fleet 27% 8% 32% 24% 17% 40% 30% 32% 12% 55% Ocean Network Express MSC A.P. Moeller - Maersk CMA CGM/APL Cosco/OOCL Hapag-Lloyd Evergreen Line Ocean Network Express HMM Yang Ming Line Zim L L 0 2,000,000 4,000,000 6,000,000 In service On order 7,404,878 MSC MSC C MSC MSC 2 5,072,270 MSC M 1,358,928 5 Source: S&P Global © 2023 S&P Global

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