Shipping giant, Maersk, reportedthis past Friday, August 4, that there could be a steep decline this year inthe global demand for shipping containers by sea, much steeper thananticipated, largely due to the stunted economic growth and dwindling customerinventories.
Maersk is among the world’s largest container shippers, boasting a market share of 17% on average. When Maersk releases reports, people sit up and listen – this year, it believes that container volumes may fall by up to 4%, which was previously estimated to be around 2.5% at best.
The reports are always well-founded and based on concrete evidence as well as trends. Goods are transported on a regular basis for consumer and retail heavyweights like Unilever, Nike, and Walmart – therefore, companies and businesses all over the world view these reports as a barometer for measuring global economic and corporate health.
The industry originally anticipated customers to draw down inventories around the middle of 2023, although that hasn’t happened yet, though it could, however, happen at the start of 2024.
Consequently, the uptick in volumes expected by the middle of this year hasn’t happened either. Things are certainly looking different in 2023 with freight rates tumbling amid a global economic slump.
It doesn’t quite end there. Things have indeed become more challenging in the shipping container sector, as hundreds of new container vessels which were ordered during the pandemic, have just started coming to market this year. Most of the orders are, in fact, still sitting in the shipyard.
All container shipping companies must now adapt to the new market conditions, particularly over the next 18months or so. It has been reported that the total number of containers Maersk loaded onto ships from April-June 2023, fell by 6% compared to last year, all the while freight rates have been reduced by half, on average.
Well, Maersk has stated that it expects global container demand to be somewhere between -2.5% to +0.5% in 2023.
Some industry experts and analysts believe that the container shipping sector is in danger of returning to the very same ‘boom and bust’ pattern which dominated prior to the last decade.
At Willbox, we are also doing everything to adjust to the ‘new normal’ as we continue to supply our customers with some of the toughest, most resilient shipping container solutions.