Container shipping lines could join 'all-out price war' in 2023

 Online container logistics platform Container xChange says falling demand through 2022 has resulted in a significant oversupply of containers, which will worsen in 2023 as more containers are launched the market.

Xeneta said carriers are canceling a large number of sailings, and a signal from Maersk of continued capacity adjustments across many services is expected to be reflected across the industry.

“In 2023, there is a high possibility of an all-out price war. It doesn’t seem that the capacity restrictions that we have seen in the past two years are due to return, so we’ll just have ample capacity both on the vessel as well as on the container side." said Christian Roeloffs, Co-Founder and CEO of Container xChange, an online platform for container logistics.

“With the competitive dynamics in the container shipping and liner industry, I don't expect especially the big players to hold back, and we do expect prices to come down to almost variable costs. We also foresee market consolidation,” said Roeloffs.

Container xChange documents the increasing default risk of carriers with the example of reports that CHINA United Lines is at risk of default on a charter party involving more than 10 containerships.

For freight forwarders, the new market dynamics make it easier for them to negotiate, leading to forecasts of contract rates falling in early 2023.

“Tight grip on costs becomes paramount for freight forwarders into the year 2023. While on one hand there will be a great deal of negotiation with shipping lines and on the other hand, operational cost optimisation will be crucial for the forwarders. There will be careful monitoring into the demurrage and detention charges for instance, insurance charges, claims etc. As capacity on the ocean side becomes more abundant, there is a valid business case for using SOCs which not just offer flexibility but greater control to the forwarders.” said Dr. Johannes Schlingmeier, co-founder of Container xChange.

Read more:

• Container shipping lines have to compete fiercely in 2023
• Warning about upcoming container freight rate war

Source: Phaata.com (According to SeatradeMaritimes)

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