WEAK EARLY 2023 PORT VOLUMES IN ABUNDANCE

Cosco Shipping’s Ports volumes for its entire portfolio of terminals also show declining volumes, with an average decline of around six per cent for the first two months of 2023. The company’s terminals in China witnessed, on average, a drop of around eight per cent. In Northern Europe, Cosco’s terminal participations in Antwerp and Rotterdam reported a decrease of more than 10 per cent, as did Cosco’s East Mediterranean hub in Piraeus. All of this should not come as a surprise, given the frequently occurring blank sailings and shipping lines regularly announcing a reduction of services.

As far as I can tell, there is no single straightforward explanation for the weak start to 2023. On the US West Coast, strikes were a key factor, but this issue was not widely manifest elsewhere, Hamburg being a notable exception. One could have thought that China’s decision to ease COVID-19 restrictions end of 2022 would have provided a boost for export volumes but at least so far, that does not seem to have happened. The global container volume forecasts for 2023 by UNCTAD and Clarkson’s (both predict around two per cent annual growth) were modest from a historical perspective, but now seem optimistic, also in view of the bleak prospects for an end to the war in Ukraine and the ongoing ‘cost-of-living’ problems in many advanced economies.

For all parties involved in making long term decisions in assets in container freight transport, the question whether the current weak volumes are due to ‘temporary conditions’ or they indicate a structural decoupling between the overall economy and container freight volumes seems as relevant as ever.

Out with the new and back with the old as carriers revert to market share strategies that further collapse freight rates and re-structuring of partnerships.

Liner shipping follows an age-old strategy when it comes to an imbalance in supply and demand. Fight tooth and nail for every container that is available to maintain as high a market share as possible even in the knowledge that this will drive freight rates to the floor. We have already heard comments from various carrier CEOs to that effect, despite the fact that most of them have full orderbooks for vessels of all sizes, justified perhaps, in their eyes as they are “greener” than the current fleet which is too young to scrap.

When the three big alliances came together not that many years ago the assumption was that it would be easier to manage capacity by reducing the number of port calls within individual strings and capacity within the