The latest BIMCO market report shows a sluggish growth of just 0.2 per cent in the container market compared to last year, reaching a total of 173.8 million TEU.
Compared to 2019, before the COVID-19 pandemic hit, the market grew 1.5 per cent, reported Niels Rasmussen, Chief Shipping Analyst at BIMCO.
Container market growth has lagged behind overall economic development significantly, as the world economy has grown 10 per cent since 2019.
“Highlighting the challenge for liner operators, the container fleet capacity in 2023 grew 21 per cent compared to 2019 and 8 per cent compared to 2022,” Rasmussen said.
The order book of new ships will add nearly 25 per cent to the capacity during the next four and a half years. Although recycling older ships will moderate the future capacity, fleet growth will be significant.
Initially, the container market saw a strong rebound from the pandemic. Container Trades Statistics (CTS) estimates that in 2021 the market was 3.9 per cent larger than in 2023 but has since lost nearly 7 million TEU due to a contraction in both east/west and regional trades.
Trades within regions, so-called regional trades, contribute about a third of global volumes and have long been key growth drivers for the market. However, CTS estimates that combined volumes in the trade lanes fell 3.7 per cent in 2023 to end only 0.7 per cent higher than in 2019, reported Rasmussen.
“The trade within the Europe/Mediterranean region has been the biggest disappointment. Volumes are estimated to have fallen 7.9 per cent in 2023 to end 12.6 per cent lower than in 2019,” Rasmussen stated.
“The reduction in trade between the EU and Russia since the war in Ukraine began has been a significant contributor.”
North/south and south/south trades that encompass all trades to and from the South and Central America, Sub-Saharan Africa, and Oceania regions have seen the highest growth rates in the meantime, according to BIMCO.
The trade into Sub-Saharan Africa and the South and Central America regions have stood out with growth rates of respectively 1.1 per cent and 11.8 per cent versus 2022 and 6.8 per cent and 9.1 per cent compared to 2019. Exports from East and Southeast Asia have been the key driver.
Growth in the east/west trades between the Asia, Europe/Mediterranean, and North America regions has been stifled by a 12.0 per cent contraction in back-haul trade lanes since 2019 whereas head-haul trades have grown 7.2 per cent since then.