The year of 2023 to be “extremely challenging” for ocean shipping market

Sea and air freight analyst Xeneta predicts that 2023 will be “extremely challenging” for the ocean shipping market and “turbulent” for the air shipping market. The sea freight volume will be reduced by about 2.5%.

Meanwhile, the capacity, according to analyst estimates, will increase next year by at least 5%. Reduced demand will result in at least 1 million TEU standing idle.

The shrinking demand combined with the increased capacity will inevitably affect rates.

According to Xeneta, spot rates on some routes will fall below pre-pandemic levels in the first half of 2023, contract rates will also decline as old contracts expire and new contracts will be concluded on terms more relevant to the current market conditions. But in the first half of the year, long-term rates will remain higher than spot rates.