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Carrier industry had a bit of a downer towards the end of 2022 – Evident by financial results
The container carriers had a bit of a rough patch in the last quarter of 2022. Even though the situation had been better earlier in the year, things definitely slowed down towards the end.
Table of Contents
| Key | |
| ++ | Strong Increase |
| + | Moderate Increase |
| = | No Change |
| – | Moderate Decline |
| — | Strong Decline |
Outbound
Middle East – North America
There’s not a lot of space in the Gulf right now, which is making the rates go up. More capacity is coming in every month.
Capacity — (+)
Rate — (+)
Note: Spot rates are flat.
Middle East – Asia
The Asian region Gulf services are seeing a rate rebound after Chinese New Year, but there’s not going to be any extra capacity coming in anytime soon.
Capacity — (=)
Rate — (+)
Note: Spot rates are flat.
Middle East – Europe
The Asian region Gulf services are seeing a rate rebound after Chinese New Year, but there’s not going to be any extra capacity coming in anytime soon.
Capacity — (=)
Rate — (=)
Note: Spot rates are flat.
Middle East – Latin America
There’s plenty of space out of the Gulf these days. Carriers are slowing down on this trade lane, which is improving the space situation.
Capacity — (=)
Rate — (=)
Note: Spot rates are flat.
Inbound Updates
Asia – Middle East
Ramadan is having an impact on the Middle East and Red Sea Market, which is causing rates to drop. But watch out – if carriers start canceling more sailings, we could see rates jump back up to pre-Covid levels.
Capacity — (-)
Rate — (-)
Note: Equipment situation is healthy across Asia.
North America – Middle East
Some carriers in the Mideast market are getting pretty aggressive, probably because the rates keep going down.
Capacity — (+)
Rate — (-)
Note: On side conditions, concessions are available.
Latin America – Middle East
Things aren’t looking too hot for Central American exports right now, especially to the Med and Mideast. The SAEC market is also heading downwards, which is making rates go back up to pre-Covid levels.
Capacity — (=)
Rate — (-)
Note: Vessels are open.
Europe – Middle East
You can breathe easy if you’re looking for capacity in the East Med – there’s plenty of space available. Rates are softening for both short and long-term contracts too, so it’s a good time to book.
Capacity — (=)
Rate — (=/-)
Note: No equipment issues.
Demand: Demand in emerging markets with higher export orders has improved according to the PMI index. However, the world economy is facing adverse effects due to increasing interest rates and the Ukraine crisis. Nonetheless, the reopening of the ASPA market is expected to facilitate a quick global economic recovery.
Capacity: Capacity is continuously improving, with both belly capacity and passenger travel capacity following an increasing trend. Although there are currently no bottlenecks anticipated in the coming months, ongoing labor disputes may have an operational impact.
Rates: There is a competitive spot market in many trade lanes, with a slight increase in charter and ad hoc rates. Long-term rates are expected to become more stable as 2023 progresses, with the tonnage growth trend playing a vital role.
The Middle East and Air Carriers
The Middle East aviation industry has seen an improvement in the pace of recovery in 2022 and is expected to continue this trend over the next decade with an increase in its share of the global fleet. According to a report, the fleet share of the Middle East will rise from 4.9% in 2022 to 6% in 2023.
Asia
In Asia, there has been a slight increase in demand since Chinese New Year, which is expected to further rise in the coming months. Available capacity is sufficient to support the soft demand, and rates are expected to remain competitive in the market.
Demand on the Asia to Europe route remains soft, resulting in decreasing rates and increasing capacity. On the Asia-North America route, providers are adding more flights, but improvement is not expected until the third quarter due to importers selling through existing inventory.
America
In the United States, capacity is open, but rates are still trending downwards. Additional capacity in the market is expected due to increased travel demand in the coming months. Capacity for North American trade lanes is anticipated to remain flat month over month, and the spot rates will remain flat for Africa, Latin America, and the Middle East, while decreasing in Asia, Europe, and Oceania.
In the Latin America market, overall capacities are expected to remain flat, while spot rates will increase for all trade lanes.
Europe
In Europe, due to the ongoing return of regular scheduled passenger flights, capacity continues to increase. Demand for the Asia trade lane will stay moderate this month, allowing for easier capacity access.
The Latin America market is overall stable, while in North America, capacity is expected to grow as the summer schedule becomes effective from the second quarter. Spot rates from Europe to Africa, Asia, Latin America, and the Middle East will remain flat, and will decrease for North America.
CMA CGM has announced revisions to the Bunker Adjustment Factor (BAF) on its RORO services connecting France to Algeria, Tunisia, and Morocco, with the new surcharges to come into effect from April 1, 2023. Read More
Maersk has provided an update on the Nhava Sheva Port in India, indicating an expected surge in export demand due to traffic and queues outside the port. Read More
Ocean Network Express (ONE) has announced new surcharges that will apply to all trade lanes to/from the United Arab Emirates, with the changes to become effective from April 1, 2023. Read More
ONE has unveiled new demurrage and detention tariffs that will take effect in the UAE from 1st April 2023. Read More
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Emirates Shipping Line LLC will implement an Environmental Fuel Surcharge (EFS) between USD 650 to USD 700 per ton, based on the price of low sulfur fuel, from April 1, 2023. Read More
Hapag Lloyd has updated local charges for the Middle East, Indian Subcontinent, and Africa. Read Details
Hapag Lloyd is introducing a West Africa Service (WA1) in May 2023 to factor in strong schedule reliability and extended port coverage in cargo planning. Read More
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The Drewry World Container Index (WCI) declined by 2% to $1,716.85 per 40ft container in the final week of March, indicating that prices are approaching their normal level. The current PMI value is 36% lower than its 10-year average of $2,690.
The US manufacturing sector demonstrated concerning trends in March, despite output increasing since last October, as growth was fractional and supported by production ramping up. Firms were able to work through their backlogs due to timely input delivery, but scarce demand resulted from pressure on customer spending due to high interest rates and inflation.
UK manufacturing production fell back to contraction at the end of Q1 as companies scaled back production in response to subdued market conditions. Although there was a fractional increase in new orders following a nine-month sequence of contraction, the overall order book levels remained low. The declining new export orders continue to be a drain on demand, balancing the signs of a domestic market revival.
Chinese manufacturers reported soft gains at the end of Q1 2023 after a solid increase in output and new orders in February. The sustained upturn in demand supported a further increase in purchasing, but inventory continued to fall as most firms maintained a cautious approach to stock building.
In February, the UAE PMI index reached 54.3, up from 54.1 in the previous month, with output growing for the first time in four months due to increasing sales and new project initiation. New orders also increased, although the expansion rate was the weakest since September last year.
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