Capacity Takes Center Stage: Global Shipping Outlook

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Credit: Tom Fisk/Pexels

The shipping industry’s prospects are uncertain, with a combination of positive and negative factors. Although there is sluggish growth in cargo volume, the focus is primarily on the availability of shipping capacity. While the container segment anticipates a significant increase in capacity, there are limited orders for new tankers. Additionally, the market is experiencing increased demand for oil and longer trade routes, resulting in a tight market and sustained high rates.

Global trade is changing and so is shipping

Global trade experienced a decline towards the end of 2022 as a result of inventory adjustments and stagnant economic and industrial conditions in the US and Europe. The global trade industry is facing a phase of reduced growth due to geopolitical tensions, protectionist measures, and reassessments of supply chains. This lower growth trend is expected to persist until 2024, putting pressure on shipping tonnage. However, there is anticipation of a stronger performance in the latter half of 2023 when consumer spending on goods increases, spending patterns normalize, inventories decrease, and wages grow.

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Source: ING