Many reports from the shipping lines and logistics providers have said that, mostly, their achievement was down by over 50% in the first half (H1 2023), compared to the same period in the previous year (H1 2022). Most of them also failed to reach their yearly target. In average, shipping and logistics companies’ achievement ranged from 50-70% of the target during H1.
The volume drop as free fall freight rate are cited as the dominant factors. In its recent report, the world’s container industry player A.P. Moller-Maersk said container shipping is predicted to fall 4% this year (2023). It was lower than previously forecast of a decline no more than 2.5%.
Following the economy slowdown, the trade volume is reported to significantly decrease. On the other hand, the freight rate that played key role for the fantastic performance of the industry in 2022, was totally on free fall since early this year. These two factors are claimed as the two dominant factors for the low performance of the industry this year.
Maersk transports goods for retailers and consumer companies such as Walmart, Nike and Unilever, and is seen as a barometer for global economic and corporate health.
CEO Vincent Clerc said he saw no sign that the destocking which has curbed global trade activity would end this year.
“We had expected customers to draw down inventories around the middle of the year, but so far we see no signs of that happening. It may happen at the beginning of next year,” Clerc said at a media briefing.
“Consequently, the uptick in volumes we had expected in the second half of the year has not occurred,” he said.
He predicted that the drawdown of inventories would take longer in the U.S. than in other regions.
Maersk posted record earnings last year due to high freight rates caused by strong consumer demand and pandemic-related logjams at ports. But freight rates have tumbled this year amid a global economic slowdown.
Read ISG Cover Story September 2023: https://theshippinggazette.com/bs-line-toward-indian-subcontinent-champion/
