GLOBAL container shipping took a turn in the second quarter of 2022, according to market research by the Global Shippers Forum and transportation economics firm MDS Transmodal.
Lockdowns in China as well as suppressed supply of manufactured goods and demand for raw materials were among the factors contributing to a drop in average revenue per container transported for the first time since 2020.
The latest news from organizations Quarterly review also identified falling sentiment in consuming countries due to rising interest rates and energy prices as a contributing factor.
The total number of containers transported was higher than what was recorded in the first quarter of this year, but the volume remained below the level recorded in the same period a year ago.
This is despite traffic that had switched to other modes or bulk shipping earlier in the year, returning to the more traditional containerized mode.
The data indicates that layover reliability and consistency showed a slight improvement in the second quarter of this year, but the improvement was apparently caused by missed intermediate layovers. Capacity loss due to skipped ports remains high.
MDS Transmodal President Mike Garratt said global network capacity increased slightly last quarter, but with stable underlying demand.
“Spot freight rates are now steadily declining, and it will be interesting to see how much of the trade in minor bulks goes to large lines as a result,” Garratt said.
“The direct connectivity and reliability of port calls offered to shippers continues to deteriorate.”
GSF Director James Hookham said it was the first time that GSF/MDS Transmodal Quarterly review shows a significant change in direction of travel.
“This is just a collection of data points, but shippers tell us that the global economy, international trade and the global shipping market have entered a new phase, with different factors at work. compared to the last 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 models imposed on shippers, or whether individual carriers will respond instinctively and distinctly to changing conditions. .
“This change in market dynamics could provide a context for using the freedoms afforded to shipping companies under anti-trust immunity and block exemption legislation to rethink industry-wide change. industry in capacity deployment, service models, call frequency and market share. focus,” Mr. Hookham said.
“Recent experience has shown that this is not a market where regulators can ‘legislate and forget’ hoping that expected behaviors are observed.
“The number of metrics needed to monitor the market are many and complex and GSF and MDS Transmodal invite competition regulators around the world to monitor this space with us over the coming months.”
In the second quarter of this year, GSF and MDS Transmodal also noted that an overhaul of container shipping service models appears to be underway with an increase in the number of services linking two or fewer regions, as well as a reduction in those connecting more than two regions. .
The organizations explained that multi-port loop schedules are being replaced by shuttle services with transshipments needed at hub ports so containers can reach their final destinations.