CAN SEA FREIGHT TOUCH TO SKY ONCE AGAIN IN 2023?

SHIPPING & FREIGHT FORWARDING IN 2023.

Ocean freight?market update & Price forecast for 2023

MARKET OUTLOOK

As the new year at the corner and many shipping line or companies reviewing budgeting & planning for the best interest of the company or for future due to rapid change in demand or trend of petroleum and energy price or war situation in the region along with historical inflation reaching an all-time high in Europe & USA, Many companies reviewing or planning year 2023 as challenging due to economic and war pressure & uncertainty in the region.

Inflation Rate in European Union?averaged 2.22 percent from 2000 until 2022, reaching an all-time high of 11.50 percent in October of 2022.

Japan's core consumer price inflation edged up to 3.7% in November, the highest it has been since 1981, Japan's inflation rate hits 41-year high. That was when a Middle East crisis disrupted oil production and caused energy prices to soar.

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PRICE WAR.

We saw a massive increased Sea Freight in year 2021 & beginning of 2022 with the extreme demand due to full opening of Global economy after COVID19 era.

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As defined above that due to demand Sea Freight price all time higher on new year holidays or year ended sales around Europe and USA Amazon Black Friday many peoples save money to enjoy holidays shopping Season.

However suddenly RUSSIA invasion in UKRAINE @FEB 2022, which caused major energy and food crisis in Europe union countries and crushed the economy all time high inflation since the spring with market disruptions related to the war.

Russia/Ukraine war impacted and gradually demand down day by day & from Q2 of 2022, we have seen a massive Sea Freight fell to 21% to 72% some regions in November and December.

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According to Freightos data, freight rates?fell 21% to $2,607/FEU in November, its lowest level since December 2020, as demand continued to slow and congestion levels decreased.

This rate is 72% lower than a year ago, though still double its 2019 level.

Despite increases in blank sailings, spot rates fell significantly for all ex-Asia lanes in November as volumes declined and congestion eased at some key ports.

HERE IS THE OCEAN FREIGHT TREND/OVERVIEW FROM FREIGHTOS. (Link)

https://drive.google.com/file/d/1IM5NLqWyuUxIAPeLtNwABNbP5MwnvwCl/view?usp=sharing

OCEAN FREIGHT FORECAST.

+ INCREASE REASONS.

The IMO 2023 is just around the corner, after implementing a sulfur fuel regulation in 2020, the IMO (International Maritime Organization) will be introducing what is now known as “IMO 2023”?to further reduce ocean shipping's carbon emissions.

The Ship Energy Efficiency Management Plan (SEEMP) is?an operational measure that establishes a mechanism to improve the energy efficiency of a ship in a cost-effective manner can cause a additional surcharged as applied on other levies in past as bunker adjustment factor, Gulf war or as VLSF.

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Fuel price can be a major increase factor in freight, if petroleum demand increased in region.

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As Ocean Schedule Reliability on upward trend since Jan 2022 so there is more space for cargo accommodation as well as new vessel will hit the ocean in 2023 with very new technology or green energy moto as per UN IMO future Goal.

Blank sailings will help close the gap of low demand and can make a space to the better price increase.

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The year is for niche or special equipment’s ISO TANKS, Flat Rack, Project Cargo, BreakBulk or LNG movements or advancements looks higher in demand and opening new sectors and trade lane.

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The hopes for a boost to demand for fuel in to crude oil importer china come as the world second biggest economy moves toward reopening its borders next month Jan2023 after three years of stringent curbs on movement and businesses to counter the spread of Covid19.

Oil prices higher on china demand.

While a Russia ban on oil sales would cut supply and unfortunately will increase the price in the regions.

Recently Russia imposes oil ban or export ban on buyer or countries who complying with G7 price cap from Feb23.

The world most consume oil country US also have fallen oil stock 1.6 million barrels in December22.

The above reasons can increase Sea Freight level in next year 2023.

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OCEAN FREIGHT FORECAST.

- DECREASE REASONS.

As the Market survey or forecast is not very good for Shipping Industry because of below mentioned number of reasons.

As you know the effect of war have long last effect on economy, As the region situation still not very good.

EU still in food and energy historical crises and Russia still face heave restriction on many commodities along with recession circumstances in many countries.

As per Washingtonpost Prices are going down because?demand for oil and gas is falling?as countries brace for recession, coronavirus outbreaks in China threaten major financial disruption and drivers cut back on gas-guzzling as they try to save money to cover skyrocketing mortgage payments and stock market losses.

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Since begging of 2022 Additional Orders or massive & over stocking in warehouses also mark stop to the new productions as Pakistan textile industry in true picture, Where many textile order cancelled or postponed by USA OR EU buyers.

China Zero Covid policy also damage the supply chain badly in 2022 Q3 and 2023 still not looks very good as per CNBC Manufacturing Orders from China down by 40% in demand collapse.

As Master lines strongly working on online system promotions same as Maersk and Hapag Spot rates now ONE, OOCL or Sharaf start or near to start online spot rates options as this will give a quick overview or transparency to customer for best/better quick price as compare to in person negotiations on rates with each liner Team.

This is also eliminating or given tuff time to Freight forwards toward price transparency or leverage to do a business as FF.

The shippers or Consignee who made a yearly contract’s against big volume commitments faced heavy losses in year 2022 as you know the year start price fall to 60% down in November in many trade lanes.

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The container industry has experienced the most profitable two years in shipping history in 2021-22. Right on cue, owners ordered more new container ships than ever before.

Even now,?as freight rates tumble , they’re still ordering more.

“A huge number of new large container ships are going to hit the water at a time of stagnating demand,” warned Alphaliner in a Dec22 report.

“The market could struggle to absorb all these new ships.”

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The container-ship orderbook now stands at 7.1 million twenty-foot equivalent units, according to Alphaliner shipping analyst Stefan Verberckmoes. The previous peak was 6.6 million TEUs in 2008. At that point, tonnage on order totaled 60% of the capacity of the on-the-water fleet.

Since then, the global fleet has more than doubled, so the current orderbook — a record in absolute capacity terms — represents “only” 30% of existing tonnage, noted Alphaliner.

Shipping adheres to a time-honored tradition: When shipowners make exceptionally high profits, they order a lot of new vessels. When those newbuilds are delivered by the yards, it kills shipowners’ profits. Such boom-and-bust behavior has been de rigueur for over a century.

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As London shipbroker J.C. Gould, Angier & Co. wrote in 1894: “The philanthropy of the shipowners is evidently inexhaustible. The amount of tonnage on order guarantees a long continuance of low freight rates.”

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Here’s how container shipping lines can escape a crash in 2023!

FREIGHT WAVES

Shipping rates are collapsing. A massive wave of new vessels will hit the water next year. Consumer demand will be battered by a global recession. Ergo, the ocean carrier industry is doomed to crash.

This is an increasingly popular theory — but it’s not what Drewry, one of the industry’s leading consultancies, predicts.

These are the main reasons to decrease or stagnant Ocean Sea Freight levels.

However, we can hope a better environment or easy of doing Business and better policy by time from big international policy makers as Global trade transport by Sea and around 90% of goods are carried over the Sea or on the water waves.

Looking forward to see your point of view regards to Global Trade.

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FYKI ONLY.

OCEN CARRIER ALLIANCES.

1.??????THE ALLIANCE – HPL+ONE+YML+HMM

2.??????OCEAN ALLIANCE – OOCL+CMA+COSCO+EMC

3.??????2M MSC+MAERSK

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Note; The above information base on my personal knowledge and analysis of more than Decade of experiences in Shipping, Logistics and Supply Chain, FF, NVOCC as well as from different sources, news or public statements, figure, reports.

Hence it can be incorrect so, if you found something missing or wrong so, please feel free to advise or update me.

I am happy to see you massages & hope that I can answer your questions satisfactorily.

Always be happy to hear from you.

Hope you like it.

Thank you.

JS.

WhatsApp 0092-332-3601209

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