Container carriers to report $15bn loss next year: Drewry
Drewry is expecting a 60% reduction in freight rates this year to be followed by a drop of 33% in 2024
Container carriers are expected to report a loss of $15 billion in 2024, according to the latest Container Market Annual Review and Forecast from Drewry.
Simon Heaney, Senior Manager, Container Research, Drewry is expecting a 60 percent reduction in freight rates this year "to be followed by a drop of 33 percent in 2024."
The low freight rates, according to Heaney, are the outcome of the demand-supply mismatch - while supply is expected to increase 6.4 percent, demand growth is likely to be tepid at around two percent.
South Asia is likely to lead the demand outlook with nearly five percent YoY increase while "western economies of North America, Europe and Oceania reside in the middle-tier in terms of growth, mainly because they have suffered most this year and therefore have a greater opportunity to bounce back."
Drewry feels it won't be until 2026 that fleet and demand growth will be in sync. "Based on our long-term supply-demand projections, carriers face a relentless challenge to achieve equilibrium over the next few years," Heaney added.
Heaney also listed out various risks, levels of uncertainty and disruption impact for the container shipping market. For e.g. geopolitical situation with high level of uncertainty but medium disruption impact. "Tensions are still running high," Heaney added.
