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The Drewry World Container Index ducked below the $2,000 per feu mark today for the first time since July 30, 2020.
The composite global spot index now stands at $1,997.22 per feu, having peaked back in September 2021 at more than $10,300.
“Container freight rates have fallen materially over the past six months and are hovering at 2020 lows across several routes,” Jefferies noted in a recent note to clients, calling for a “major supply response” to right-size the market.
While much has been written about the declining spot rate environment, there is also now a record-breaking fall in long-term rates, according to Xeneta, a freight rate benchmarking platform.
Average long-term contracted rates dropped by 13.3% in January, Xeneta reported last week.
Xeneta CEO Patrik Berglund commented: “Global demand has fallen away, congestion has eased, equipment is available, and the macro-economic and geopolitical situations are, to say the least, complex.”
Liner shipping will make just 5% of 2022’s mega profits, and up to 25% of the massive container orderbook will likely be postponed were the headline predictions in Splash’s 2023 liner outlook published last month.
Yesterday Maersk warned it was expecting 2023 net profits to slide by up to 93.5% year-on-year.
Recent quarterly announcements from global liners Hapag-Lloyd and Ocean Network Express (ONE) have also highlighted the changed fortunes in container shipping.
“The party is over,” Hapag-Lloyd CEO Rolf Habben Jansen told reporters at a briefing last Tuesday.
“Now we have to fight for every box again to get our ships full,” he said.
Japan’s ONE, meanwhile, recorded a 50% quarter-on-quarter drop in profits last week. Credit: Splash247 By: Sam Chambers