Four weeks of gains in spot container freight rates are expected to evaporate as mainline operators continue chasing market share despite weak demand, says an article published on container news website.
Container Freight Rates
Four Weeks of Gain, Now Expected to Decline: After four weeks of increasing spot container freight rates, the trend is anticipated to reverse due to carriers pursuing market share in the face of weak demand.
Specific Rate Changes:While Transpacific rates had increased, Shanghai-North Europe rates have started to decline as carriers add more capacity.
Anticipated Rate Behavior:Analysts expect rates to fall back into the usual pattern for November with early-month hikes followed by mid-month declines.
Market Dynamics And Carrier Strategies
Capacity Increase:Forecasts indicate a substantial rise in capacity for November on both Transpacific routes compared to October.
Impact on Rates:Despite hopes of rate increases in December, the report suggests that higher rates might not be sustainable due to insufficient capacity withdrawals by carriers.
Chasing Market Share:Major operators like Maersk are noted to be chasing market share, with Maersk making efforts to regain volumes even after incurring losses in Q3 2023.
Maersk And MSC Strategies
Maersk’s Actions:Despite facing losses, Maersk has increased its capacity by chartering more ships and implementing additional loader services to the US East Coast.
Competition with MSC:Mediterranean Shipping Company remains active in chartering and expanding its capacity, despite having some ships idled for the time being.
Idled Fleet And Capacity Discipline
Decrease in Idled Fleet:The number of idled vessels has decreased significantly from its peak in October, signaling a reduction in the idle fleet.
Capacity Discipline Concerns:As the idle fleet shrinks and liner operators seemingly lose capacity discipline, the report highlights the challenges of sustaining higher rates in this context.
The current trends indicate a dynamic and competitive environment in the container shipping industry, with carriers making strategic moves to gain market share despite challenges in sustaining higher rates and earnings.
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Source: container news
