The general expectation that the bullish liner market was going to ‘normalize’ in the second half of this year and in 2023 has proved to be incorrect.
Low cargo demand ex China has increased the pressure on spot ocean freight rates on the two big East West trades in the past weeks.
Last week’s spot freight rates between Shanghai and North Europe took another 16.1% hit last Friday, falling to USD 3,526 per feu as published by Shanghai Shipping Exchange.
Several carriers predicted that spot freight rates on this trade lane would settle at levels above the pre-pandemic USD 2,000/feu of early 2020 as operational costs (bunkers, charters) are much higher now.
With spot rates falling 77.4% since their peak on 7 January and accelerating rate erosions in recent weeks, the market now seems to be heading towards a ‘hard landing’ instead of the expected ‘normalization’.