The Future of Container Shipping

The Ups and Downs of freight rates are not new to the world. However, in today’s market the boot is definitely on the Carriers' foot - that’s for sure.

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What are the carriers doing with their new found wealth?

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‍Unsurprisingly many Carriers are doing what comes naturally and ordering new vessels. This should be the last time they order vessels which have the capability of running on fuel oil, even low sulphur as the move to carbon neutral shipping looms in the not too distant future!

With so many new vessels being ordered there will without doubt be a substantial turn on whose foot the boot is on. Given the current state of the market, with many carriers looking to lock in the new high rates for long periods of time (contract periods that they would never consider previously), when the pendulum swings back, caused by a glut of new capacity that carriers will need to fill, there should be little doubt that pricing carnage will ensue.

Shippers have long memories, long enough to want to repay the carriers for their freight increases, innovative surcharges, short term rates, peak season extras, Demurrage and Detention charges, chassis usage charges, fuel charges to name but a few.

Invoicing errors continue at a high level and with the amount of time it takes to get resolution, it is sometimes simpler to pay the over bill rather than to spend time getting the invoice updated. However, things will change without a shadow of a doubt.

So when the new vessels of 2023/24 are all on the water let’s see just how many different carrier names remain in business.

Carriers today are protected by being in consortia. This means that they can play with the knowledge that there is only competition from a limited number of carriers. No one will place all their cargo with two carriers within the same consortium. After all, that is the same as placing all your eggs in a single basket.

Instances such as the ONE Apus, Maersk Essen and MSC Aries all of which lost containers overboard on the trans Pacific route certainly showed that the situation can be very costly to shippers when a General Average is called.

2021 has not been a great year for shippers and importers, however, look on the bright side: 2023/4 is not far away now and for some, when the tide turns (as it must) they should watch out!

Carriers' lives will never be as good as they are now !

‍FYI

At the time of writing:

Far East to West Coast Spot 1/1/2021 - 8,000 per FEU
Far East to West Coast Spot 31/8/2021 - 13,750 per FEU

Far East to East Coast Spot 1/1/2021 - 5,550 per FEU
Far East to East Coast Spot 31/8/2021 - 10,050 per FEU

Far East to North Europe Spot 1/1/2021 - 8,000 Per FEU
Far East to North Europe Spot 31/8/2021 - 13,750 Per FEU