Zencargo Market Update: 28th November
Nov 28, 2022
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Nov 28, 2022
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Following the surge in demand and rates for ocean shipping over the past two years, significant challenges lay on the horizon as the market rapidly cools. With the lack of a true peak season at the end of 2022 and growing economic pressure in the form of rising energy prices and inflation, analysts at Xeneta are predicting a 2.5% contraction in container volumes for 2023.
Compounding this predicted fall in demand is the excess capacity which is set to enter the market in 2023 with the potential addition of up to 1.65 million TEUs of capacity in the form of new vessels. Some market forces will reduce the impact of the increased capacity, such as the demolition of older vessels and the introduction of the IMO regulations as some ships will be idle while work is performed and others will be forced into slow steaming, although these factors will only partially offset the higher capacity brought into the market by the new vessels.
However, this not only poses challenges to carriers but also shippers as they enter into long term contract negotiations in a volatile climate, as shippers plan for reduced demand while carriers aim to maximise volumes. The spot market also poses its own set of problems to shippers as rates continue to fluctuate causing difficulties in budgeting for transport costs.
As railroad operators and unions continue to negotiate, the cooling off period looms, due to expire at midnight on the 8th December. This cooling off period is a time where both parties maintain the status quo and unions are not able to engage with any strikes or work lockouts.
If the negotiations fall through however, rail unions would have the right to strike from the 9th of December which would have disastrous implications for US supply chains as railroads are responsible for transporting 40% of freight in the US. We had discussed the concept of a strike strategy for shippers in previous market updates which can be read here, and will be bringing you the latest news on the potential US railway strike action in the market updates in the coming weeks.
If you’re struggling with the best way to approach rates for 2023, we are currently offering a free 1:1 strategy rates consultation to support shippers with advice on everything from seasonality trends to different rate options. To secure your spot please click here.
Central China to USA and Europe
North China to USA and Europe
South China to USA and Europe
European Bank Holidays
We anticipate a shortage of availability and the occurrence of delays around the bank holiday periods. Plan ahead and allow extra time for your products to be delivered.
December 1st – Portugal, Romania
December 2nd – Romania
December 3rd – Spain
December 6th – Finland, Spain
December 8th – Albania, Andorra, Austria, Italy, Liechtenstein, Macedonia, Malta, Monaco, Portugal, San Marino, Spain, Switzerland*
December 13th – Malta
December 24th – Austria*, Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Luxembourg, Slovakia, Sweden
December 25th – Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden
December 26th – Austria, Belgium*, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France*, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Romania, Slovakia, Slovenia, Spain*, Sweden
*Not in all regions
The route ahead
The information that is available in the Weekly Market Update comes from a variety of online sources, partners and our own teams. Click below to learn more about how Zencargo can help make your supply chain your competitive advantage.
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