According to maritime consultancy Maritime Strategies International (MSI), the tendency for container carriers to slow vessel speeds to cut costs could strengthen under current global conditions. And recovery in the container shipping market will be overwhelmed by the flood of new vessels entering service.
Data from the early months of this year have been “dismal”, but the industry will see some modest annual trade growth at least, starting from the middle of this year, MSI said in its latest report.
MSI identified lower average speeds for vessels, since the middle of last year, could have an impact on the available capacity overall. “An interesting recent trend – which we believe has not received the attention it deserves – has been a slowdown of the sailing speeds of container ships since mid-2022, above all for larger assets. On average larger vessels have seen average speeds drop by around 1 knot between mid-2022 and Q1 23, which if maintained would represent a meaningful reduction in effective vessel supply.”
Decreasing speeds stem more from low trade volumes and higher fuel costs than any concerns about the impact of upcoming environmental regulations, MSI indicated. “If ships do not reaccelerate this would – albeit only partly – help to offset the impact of increasing over-supply.”.
Due to the new tonnage that is expected to be delivered this year, and with 200,000 TEUs already delivered, carriers will need to cascade ships to new markets, raising the average vessel sizes as well as the available capacity- thereby notably affecting the freight rates in the more minor trades.
(Dreamstime photo)
