Spot rates will remain volatile throughout the year. Carriers will aim to raise spot rates through smart capacity management and general rate increases (GRI).

Steadier long-term rates will be observed this year than those seen last year. Spot will hover just below or above long-term rates throughout this year.

As container shipping is inextricably linked to consumer spending, a reduction in purchasing power and appetite for spending globally will lead to a container shipping demand growth of 2-3 per cent in terms of TEU volumes, said the report by the Norway-based ocean and air freight rate benchmarking and market analytics platform.

“Xeneta expects 2024 to be at least on par with 2023, meaning demand must increase dramatically if the market (im)balance is to be maintained without carriers taking action themselves,” it said.

Carriers have a number of options at their disposal to manage capacity in the face of high levels of fleet growth, such as the demolition of sub-standard ships. Xeneta, therefore, expects the amount of capacity being removed from active service to increase in 2024 from previous years while still being shy of the all-time record of 657,000 TEU set in 2016.

Carriers will also wrestle with the capacity versus demand imbalance through cascading larger ships onto smaller trades. This could be seen as a desperate measure to sacrifice profitability on a smaller trade in order to protect their major trades, the report noted.

Carriers will continue to do everything they can this year to reduce the overall cost of providing services to shippers. As the market will remain heavily stacked against them, they may look to measures that negatively impact their customers, such as blanked sailings.

Climate pressures on shipping are growing ever stronger and 2024 will see this ratchet up another level with the introduction of the European Union Emissions Trading Scheme (EU ETS).

More carriers and shippers may choose hinterland transport over feeder services around the EU this year and prefer to deploy their most efficient ships onto the EU trades and moving less efficient ships to regions where they don’t have to pay for emissions, the report added.

Fibre2Fashion News Desk (DS)