So, the first week of the Chinese New Year has ended, but the analysts' forecast is not coming true as quickly as we would like.
The global container index, according to Drewry, has dropped by only 1% over the past week, and in principle, since the end of January, the rate has been gradually (sooo smoothly) decreasing.
How do major carriers feel amid the conflict?European shipping companies completed the 4th quarter of 2023 with losses, but in the first months of 2024 they may well catch up. Any surcharges that are currently applied to both short-term and long-term rates will fundamentally change the situation. These may be surcharges for military risks, for the peak season, for additional capacity, and they play a greater role than increasing the volume of transportation.
Here is an example from the Maersk report:If 100,000 more 40-foot containers are transported, the annual profit increase will amount to only $ 0.1 billion. If the number of containers remains the same, and the rate increases by $100/40-foot container, then the impact on annual profits is already $ 1.2 billion.
Despite the profit from the increase in rates, companies are forced to use these funds in additional capacities. And then, when the passage through the Suez Canal becomes safe again, a new problem will arise, which they are already preparing for — cost inflation.
What's next?Judging by the rate of decline in rates and if the conflict in the Red Sea continues until the end of the year, we expect that by the end of 2024, the price will gradually decrease to the average value between mid-2023 and early 2024.