SSI believes that freight rates in the international market will cool down in 2023, when port congestion is resolved, China reopens. At the same time, a strong increase in the supply of new-built container ships also contributed to the adjustment of freight rates.
In the port and shipping industry report, SSI Securities said that congestion on the US West Coast has improved significantly, but the hot spot has shifted to the US East Coast. And port congestion in Europe and the Mediterranean is exacerbated by strikes at many ports around the world.
SSI believes that supply chain disruptions will continue in 2022. Congestion at US and European ports cannot be resolved before 2023 as bottlenecks still occur in many stages of the supply chain, including lack of demand. ports, lack of trucks, warehouses and workers.
In addition, port infrastructure needs time to adapt to larger, newly built vessels before the congestion is resolved. On the other hand, the global movement of goods is heavily dependent on China and its Zero COVID strategy.
SSI believes that congestion will gradually improve in the second half of 2023, when COVID-19 prevention measures are lifted in most markets, including China.
Freight rates in the international market will gradually return to normal. The current high freight rates will gradually adjust due to reduced demand and increased supply.
Accordingly, the supply of new-built container ships will increase sharply and enter the market (2023: 9.9%; 2024: 11.1% compared to the tonnage at the end of 2021). This will put pressure on freight rates.
However, the main factor determining the price adjustment is still the issue of supply chain congestion. Currently, port congestion has not improved.
(Source: SSI)
Therefore, SSI believes that the freight rates will need a long time to adjust from the peak, the freight rates will gradually decrease but remain high in the second half of 2022. However, the freight rates may decrease sharply in 2023 if the situation The congestion is resolved and China reopens.
However, the price level will be higher than the pre-COVID level because carriers have to bear much higher investment and operating costs than before.
Domestic freight rates will remain at their peak in 2023 as the market is still undersupplied with the majority of Vietnamese fleets being leased to overseas markets with long-term contracts.
Fuel surcharges are also added to freight rates to reflect rising fuel prices, supporting carriers in the face of oil price fluctuations.
Demand in Intra Asia remains strong as the region benefits from supply chain shifts from China to neighboring countries, which helps support the feeder segment.
Charter rates are likely to remain around the peak in the second half of 2022, then gradually decrease in 2023 as the supply of new-build ships enters the market. However, the contract term may be shortened due to the downside risk in the market.
According to VietnamBiz.vn
