DHL Global Forwarding has unveiled its Ocean Freight Market Update report, highlighting the latest developments of the global ocean freight market.
DHL said a muted peak shipping season in 2022 has prompted a downward shift for ocean freight rate levels as effective vessel supply increases, demand into some key import markets slows.
“This year, we did not see the normal rush for space ahead of Golden Week when factories close in China,” said Kelvin Leung, CEO at DHL Global Forwarding Asia Pacific.
Related: Demand of goods from Asia slumps, container ships cancel voyages: Bloomberg
According to maritime analysis firm Sea-Intelligence, 50 per cent of the global port congestion that was tying up vessels at ports in January had been cleared by August.
The release of this extra capacity has relieved physical shortages of capacity and added to downward pressure on spot freight rates which have been in decline on the major East-West trades since the second quarter.
“We’ve seen an easing of port congestion, although labour strikes at ports in the U.K. are causing some disruption and we’re still seeing vessel queues on the U.S. east coast which has offset improvements at U.S. west coast ports,” Leung said.
The demand side outlook continues to weaken on war risk, skyrocketing energy costs, political instability and general inflation, all of which are now impacting overall consumer spending and thus trade volumes.
DHL said the combination of a manufacturing sector in recession, and rising inflationary pressures would add further to concerns about the outlook for the eurozone economy.
Meanwhile, the closure of factories during China’s October Golden Week holiday along with the Chinese government’s continuing zero Covid-19 policy have impacted production, reducing demand for shipping capacity.
Maritime research consultancy Drewry has now lowered its global container handling demand outlook for 2022 and 2023 to 1.5 per cent, and to 1.9 per cent, respectively, on the back of heavily downgraded GDP predictions.
The more favourable supply-demand balance for shipping’s customers has led to a global schedule reliability improvement of 5.8 percentage points in August compared to July, while the average delay for late vessel arrivals also dropped sharply, according to Sea-Intelligence.
Source: DHL media release.