The slow market pickup in China and the low consumer demand in North Europe suggest that the shipping industry will continue to struggle. In major ports across Asia, such as Ningbo, Shanghai, and Singapore, container prices have faller sharply in the past year indicating that the current situation may persist in the foreseeable future.

According to a market update into Asia´s container trade by online container logistics platform Container xChange, the mid-term outlook for the industry indicates a slowdown in container trade on Asia to EU, and Asia to America trade lane. Specifically, container rates remain low, with Asia-US West Coast rates in January 2023 being 11% lower than in January 2020, and Asia-US East Coast rates in January 2023 being 84% lower than in January 2022.

The long-term outlook for the shipping industry remains uncertain, as container rates are experiencing a significant decline, with contract rates moving closer to spot rates.

Despite the decline in container rates in different regions such as China and Southeast Asia, the demand for shipping remains weak due to global inflation and restricted demand, leading to a significant drop in freight prices, as the container logistics platform says in its market analysis for the region.

The slow pace of exports and outbound container volumes is expected to continue into the first quarter of 2023, as forecasted by Container xChange.

“Container trends are a crucial barometer of economic progress and global trade, and the current market outlook appears bleak. Container prices and leasing rates are plummeting, with the global shipping industry witnessing a freefall in container rates. The blank sailings have not been able to control the sliding prices, and the mid-term outlook for the industry indicates a slowdown in container trade on Asia to EU and Asia to America trade lane. However, contract rates are closer to spot rates, indicating the lack of demand for long-term commitments, which can be attributed to market uncertainty,” said Mr. Christian Roeloffs, CEO & Co-Founder, of Container xChange.

With a freefall in container rates, weak demand, and a shift in trade routes the shipping industry is facing a complex situation, and the current outlook remains uncertain, as it is furthermore pointed out.

In the market update it is highlighted the fact that “comparing the prices of a 20-foot cargo-worthy container in the top three ports of Asia – Ningbo, Shanghai, and Singapore – to their prices in January 2022, there is a significant decline in all three ports. The average price in Ningbo decreased from $2,460 to $1,290, while in Shanghai it fell from $2,370 to $1,270, and in Singapore it went down from $2,410 to $1,240.”

While China´s exports to the US and the EU declined in 2022, exports to Russia increased by 8.3%. As Container xChange predicts export growth and outbound container volumes will remain low in the first quarter of 2023.