Drewry, a leading maritime consultancy, predicts that around three million TEU of new shipping capacity set to enter the market next year will likely be “more than offset” by ongoing market disruptions, leaving shippers with no relief in sight. The uncertainty surrounding potential strikes at U.S. East Coast ports adds to the volatility, prompting Drewry to analyze different scenarios: one with a strike occurring in January and another without. Their findings indicate that freight rates are expected to continue rising in both scenarios.
According to Drewry’s Philip Damas, port strikes could have a significant inflationary effect on spot rates, impacting not only U.S.-connected trade but potentially causing ripple effects across other global trade routes as well. “The implications of port strikes will resonate well beyond the immediate area, leading to increased costs throughout the shipping industry,” he noted.
On the other hand, if a strike does not occur, while some spot rates may see a decline, Drewry emphasizes that a variety of other factors will remain in play to support further increases. Notably, the implementation of the new emission trading system carbon taxes, which are set to rise by 75% starting January, will contribute to upward pressure on rates. This tax adjustment is part of broader efforts to address environmental concerns within the shipping sector, but it also signifies a financial burden for shippers.
“We are essentially looking at a gradual increase in freight rates moving forward,” Damas explained. “It’s important to remember that, prior to the pandemic, global freight rates had surged by 87%, and we are now facing dynamics that may drive rates up at a slower but steady pace.”
In summary, while new shipping capacity is on the horizon, the combination of potential port strikes, heightened carbon taxes, and other market factors suggests that shippers may continue to face challenges, leading to sustained pressure on freight rates in the coming year.
Marex Media