3 Things That Matter For The 2nd Quarter

The 3 key factors affecting the market moving forward will be:

Vessel integrity/blank sailings and the cost of the disruptions to the customer, Port issues with empty returns (as a result of #1), and Incoming capacity from carriers in 2023

Current Weak Demand with an enormous incoming order book does not bode well for the industry. Carriers are very reluctant to dry dock ships (a very expensive process) and will instead rely on late vessel cancellations and blank sailings to ensure their sailing vessels are as profitable as they can be.

MSC is taking 1 million TEU in 2023 and 2024, a 40% overall increase against current Total orderbook. From all carriers, there is 30% increase over the current fleet 2.5 ML TEU will hit the water in 2023, 3 ML in 2024 and 1.7ML in 2025. Rates currently down an average of 80% year on year – this will not likely change anytime soon. Carriers and generally the world Economic organizations expect volume and growth to pick up in the 3Q, this year but with the current orderbook demand will in no way outstrip supply anytime soon, unless there is some significant ad unforeseen disruption.

Inconsistent schedules bring issues on multiple fronts:
Without vessels to load empties, export schedules will be in total disarray and changes to first receiving, cutoff and empty returns should be expected. Carriers do have to pay terminals for storing empties or loads, and they will make every effort to limit their costs - this means shutting out empties and making schedule changes at the last minute. This will cost importers and exporters alike in slightly different ways but always with increased trucking storage, chassis rental and dry run issues.

Rail: Rail congestion is also still an issue – we are currently seeing 1-2 week delays between terminal discharge and train loading with some carriers averaging 2 weeks.

Blank Sailing: (link to file Space Situation as of 2023.03.06 doc)

Many vessel sliding from Wk 10 to Wk 11 resulting the blank sailing increase for the current week.

Vessel delay & Equipment Status

Vessel delay:Average waiting time is 1 days. Vessel delay average at 5-7 days.

Equipment supply: No equipment shortage is reported. Local equipment situation can be found in the Equipment situation tab in TP Service Rotation doc.