GLOBAL container shipping turned a corner in the second quarter of 2022 according to a market review from the Global Shippers Forum and transport economics firm MDS Transmodal.
Lockdowns in China along with suppressed supply of manufactured goods and demand for raw materials were among the factors contributing to a fall in average earnings per container carried for the first time since 2020.
The organisations’ latest Quarterly Review also identified plummeting sentiment in consuming countries due to rising interest rates and energy prices as a contributing factor.
Total container carryings were higher than what was recorded in the first quarter of this year, however the volume remained below the level recorded in the same period a year ago.
This was despite traffic that had switched to other modes or to bulk shipping earlier in the year returning to the more traditional containerised mode.
Data indicates the reliability and consistency of port calls showed a small improvement in the second quarter of this year, but the improvement was seemingly caused by intermediate port calls being missed altogether. Capacity lost to skipped ports remains high.
MDS Transmodal chairman Mike Garratt said global network capacity grew marginally in the last quarter, but with a flat underlying demand.
“Spot freight rates are now falling steadily, and it will be interesting to see as a consequence the share of the minor bulks trade that returns to the major lines,” Mr Garratt said.
“The direct connectivity and reliability of making port calls offered to shippers continues to deteriorate.”
GSF director James Hookham said this is the first time the GSF/MDS Transmodal Quarterly Review is showing a significant change in the direction of travel.
“This is just one set of data points, but shippers are telling us the world economy, international trade and the global shipping market have entered a new phase, with different factors at work compared to the past two years,” he said.
Over the coming months, GSF and MDS Transmodal plan to monitor whether the opportunistic gains made by shipping lines since 2020 are consolidated into a strategic shift in rates and service patterns imposed on shippers, or whether different carriers will respond instinctively and distinctively to the changing conditions.
“This change in market dynamics could provide a context for the use of freedoms granted to shipping lines under anti-trust immunity and block exemption legislation to re-engineer an industry-wide shift in capacity deployment, service patterns, port call frequency and market share concentration,” Mr Hookham said.
“Recent experience has shown this is not a market where regulators can ‘legislate and forget’ hoping expected behaviours are observed.
“The number of parameters needed to monitor the market are many and complex and GSF and MDS Transmodal invite competition regulators around the world to watch this space with us over the coming months.”
In the second quarter of this year, GSF and MDS Transmodal also found a reshaping of container shipping service patterns appears to be underway with an increase in the number of services connecting two regions or less, together with a reduction in those linking more than two regions.
The organisations explained multi-port loop schedules are being replaced by shuttle services with transhipments required at hub ports so containers can reach their ultimate destinations.
