Sea freight rates have dropped substantially.
November 3, 2022
Spot ocean freight rates are expected to fall to 2019 levels as early as the end of this year, according to a research report by HSBC. HSBC's explanation for this phenomenon is that shipping market demand is lower than expected, port congestion is easing faster, and there is a small "price war" in the market for goods, which leads to the continuous decline in freight rates.
According to relevant data, at the beginning of October, the order of container ships in the maritime market has been close to 7.1 million TEU. New ships with a total capacity of 2.34 million TEU will be delivered next year, compared with 2.84 million TEU in 2024. The two-year average is 2.6 times the average of the past 20 years.
New ship capacity input, the market supply and demand will be more tense. HSBC expects shipping lines' profits to fall by more than 80% over the next two years as shipping rates continue to fall amid a supply-demand imbalance. While there are many signs in the shipping market that expect rates to return to the 2019 average, the changes in the shipping market are significant. Shipping lines' stop-hopping, capacity cancellations, congestion at ports in northern Europe and the eastern United States, and shipments during the holiday season can cause rates to reverse, so it's best to place orders as soon as possible at current low prices.