The latest news in the logistics industry 07/05/2023
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!Figure of the week!
66,8 %
Vessel punctuality rates on major maritime trades in May, have risen more than 36 points since January 2022. According to Sea Intelligence, this is the highest rate since July 2020.
Sea freight: Maersk and CMA CGM increase FAK rates
Experts agree that?market normalization is no longer a concern?because there has been no true recovery and rates have continued to decline. Spot rates have nearly returned to 2019 levels, and are even beginning to go below them. Few people expect that rates will rise this summer due to increased demand. Drewry, who had recently predicted such a bounce, is now altering his tune and "expects East-West spot rates to fall on most routes over the next few weeks." "There are?no signs of recovery?in the near future,” affirms an OVRSEA expert.
If low demand is to blame, it is the?current historical overcapacity?that is causing the rate erosion from which shippers profit. According to Linerlytica, new container ship deliveries in June totaled?277,873 TEU, a monthly record. In contrast, just 47 container ships (for a total of around 85,000 TEU) were scrapped in the first half of the year.
Shipping companies are not trying to slow down this overcapacity – and therefore the fall in rates (see below). However, some are beginning to react. Maersk and CMA CGM have announced a sharp increase in FAK rates for August 1, to?1900 USD/FEU?for the former and?1950 USD/FEU?for the latter, on the Asia-Northern Europe trade. Could this be the turning point in spot rates this year?
Sea freight: blank sailings are at an all-time low
2023 is a year unlike any other. Having emerged stronger from the post-pandemic rebound, shipping companies are now operating at?full capacity. This certainly heralds a price war as the landscape is reshaped, both post-Covid and post-Alliance 2M. The latest data on blank sailings bear this out. According to Sea Intelligence, the number of canceled sailings is?at its lowest since 2020.
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Less than 10% of crossings were withdrawn?in June, a figure that falls below 5% on the Asia-Western Mediterranean trade. This is unprecedented and fantastic news for shippers, who now have the most options available to them. Nonetheless, blank sailings increased at the?start of July, "probably reflecting the companies' desire to control the fall in spot rates.” Companies may be changing their strategy. To be verified in the next few weeks…
Air freight: summer calm begins, rates are falling
The decline in air freight rates does not seem to have said its last word. After a further moderate fall in June, the traditional summer calm could pull them down again.
The Baltic Exchange Airfreight Index (BAI) reported that average spot fares on Hong Kong-Europe reached?3.73 USD/kg?in June, up from?3.77?USD/kg?in May. The average rate to North America declined from?5.07 USD/FEU to 4.92 USD/FEU.?This isn't a crash: the market isn't doing too badly and is exhibiting?signs of stability. On a rate basis, average spot rates have fallen by more than 40% but remain substantially above their levels in 2019.
According to the TAC Index, rates have stabilized between China and Europe over the last two weeks, but?have plummeted by 5% on the transatlantic route?in Europe-North America.
Rate hikes?are still feasible in September, assuming that demand rises as expected. Capacity should reasonably decrease with the end-of-summer flights on international routes.
????Until Next Week
DocShipper Team
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