Yang Ming General Manager Du Shuqin said after the shareholders' meeting on the 24th that the Red Sea crisis has had a significant impact on the shipping market, resulting in a direct reduction of 15% to 20% of global capacity, which in turn has pushed freight rates to a small peak.
Du Shuqin pointed out that the current market is not only facing a shortage of ships, even the container is in short supply, especially in the Western Mediterranean and other areas, there has been port congestion. This tight supply and demand situation makes the global container liner market has become particularly tense, the Red Sea crisis is not resolved, the performance of the peak season in the third quarter is quite predictable.
Du Shuqin further analysed the positive and negative factors in the shipping market. On the positive side, the Red Sea crisis has consumed part of the capacity in the market, resulting in a shortage of ships, which has pushed up freight rates. In addition, with the traditional peak season approaching in the third quarter, terminals are likely to be more congested and Yang Ming plans to increase peak season surcharges from 16 June to cope with market demand.
However, Du Shuqin also pointed out the negative factors. According to Alphaliner's latest forecast, the supply growth rate of cargo flights this year is 9.7 per cent, but this growth rate has been partially offset by the impact of the Red Sea crisis. Once the Red Sea crisis is lifted, the future of new ships will join the container liner market will have a certain impact. In addition, geopolitics, inflation and other factors may also cause changes to the container liner market.
Du Shuqin also mentioned that in 2021 by the impact of the epidemic, the container shipping market has seen unprecedented prosperity, but the ups and downs of the change is very big. In contrast, the market situation in 2023 is closer to normal. Originally, the market expected an oversupply situation this year and next year, leading to a decline in freight rates. However, due to the unexpected factor of the Red Sea crisis, shipping rates unexpectedly rose and reached a small peak.
He also stressed that the peak season in the third quarter had come early as a result of the Red Sea crisis and that the peak season effect was expected to continue. There is not only a shortage of ships on the market, but also an oversupply of containers. In addition, due to the detour of ships, port demand in the Western Mediterranean and other places, leading to increased port congestion, which may also affect the efficiency of ship use. With the onset of the peak season, congestion at these terminals is likely to intensify, further exacerbating the tension between supply and demand for ships and containers.
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