Page 11 - LUA November - December 2023 for Magzter

"It could be painful as many shippers
who changed supply chains during
the unrest on the West Coast may find
themselves with little other choice than to
go back. Rates into the US West Coast will
command a premium rate if this happens.
“That means the spread in pricing
between East Coast and West Coast spot
If spot rates do not rates will fall below its parity of $1,000 per
FEU. Shippers need to consider reliability
recover, we could face and predictability of transit times and
some challenging cargo movements, not just pricing.”
quarters in this BREAK-UP OF ALLIANCES
subdued market MSC and Maersk got a jumpstart on this
environment. new reality when they decided to end
the 2M alliance on January 25, 2023. The
ROLF HABBEN JANSEN break-up of the 2M alliance, coupled with
HAPAG-LLOYD
MSC’s aggressiveness in growing its fleet,
is a wild card for 2024. "We will now also
capacity removed on Far East to North see how the other top carriers adjust to the
America trades." new landscape."
Sand adds: “Shippers need to find
RETURN OF “CLASSIC out what strategy their logistics service
SEASONALITY” supplier is adopting, as one may fully
The familiar ebb and flow of container redeploy its fleet while another may
shipping demand may return in 2024 - "but it concentrate on fewer services and less on
won’t all be plane sailing... There is no doubt global coverage. You can use this revealed
we are now transitioning out of the crazy position of your carriers to your advantage
Covid years and into something a little more to get a better deal - in terms of both
recognisable. We expect these green shoots service and price.”
of recovery to flourish further in 2024,
re-aligning the lost connection between SUSTAINABILITY IN FOCUS
Peter Sand, Chief Shipping Analyst, importing containers and real underlying Climate pressures on shipping are growing,
Xeneta says: “No two trades are alike - so demand from consumers and businesses. and 2024 will see this increase with the
you must understand the data across all This means carriers and shippers can introduction of the EU Emissions Trading
the lanes in which you operate. If you track expect the return of a semblance of “classic Scheme (EU ETS).
only the top trades you miss opportunities. seasonality” during 2024." "In principle, this scheme will see
For instance, while demand from China Sand adds: “This will reintroduce carriers applying another surcharge,
into North America and North Europe is normal volatility of spot rates. Shippers who which they hope will cover the cost of
down, Chinese products are finding new have forgotten all about what that means the allowances they need to buy for the
customers in the Middle East, ISC and will quickly remember if their timing of carbon emitted on sailings within and to/
South America with volumes growing tendering collides with a classic spot rate lift from the EU. From a shipper perspective,
quickly on those routes." which sees spot as well as long term rates go these additional costs will be even more
up. You need to stay on top of this because complex than bunker surcharges," says
CAPACITY & FLEET GROWTH not all trades may react in the same way. Xeneta in its report.
As highlighted by Drewry, record levels of When overcapacity reigns - as it will in 2024 Based on legislation, carriers and
capacity will continue to cause a headache - some trades may resist what we would freight forwarders will introduce "a
for carriers. Xeneta says: "As we look traditionally consider normal.” plethora of new surcharges for shippers to
towards 2024, carriers will continue to do negotiate," adds Sand. "These will muddy
everything they can to reduce the overall INDUSTRIAL ACTION waters as we have seen in the range of
cost of providing services to shippers. As Industrial action on the U.S. East Coast surcharges already announced by carriers.”
the market will remain heavily stacked could see shippers head back West but Geopolitical wild cards (Taiwan,
against them, they may look to measures rates could be at a premium, says Xeneta. for example), environmental factors
that negatively impact their customers “Any disruption due to industrial (Panama Canal, for example) and global
such as blanked sailings. To illustrate actions will impact cargo entering North pandemic (Covid, for example) are
the point, throughout 2023 we have America via U.S. Gulf Coast and East factors that cannot be ignored while
seen around 25 percent of announced Coast ports from early in 2024," says Sand. planning for 2024.

NOVEMBER - DECEMBER 2023 LUA 9