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Critical years ahead for container shippingCritical years ahead for container shipping

Increasing congestion at container depots and the end of the 2M alliance in January 2025 could see further supply chain disruption and another shake-up in carrier collaboration and operations.

Nick Savvides, Europe correspondent

September 15, 2023

3 Min Read
Containership at sunset in Singapore
Photo: Marcus Hand

MSC and Maersk announced the break up of their alliance earlier this year, but the fall-out from that decision will not be fully realised until January 2025 when the alliance is formally ended.

Speaking at the Container xChange Digital Container Summit, John Fossey of Drewry Shipping Consultants said, “If in January 2025 the division of 2M leads to four or five stand alone carriers then rates could be very challenged as a result.”

With an excess of capacity still chasing too little freight Fossey said that carriers could revert to the days where they had little price discipline, aiming for market share to make sure their huge newbuildings achieve the maximum utilisation levels.

Supply is set to outstrip demand in every year from 2022 onwards, where growth from that year reached 0.5%, with this year’s growth forecast to be 0.3% recovering to 2.6% and 2.9% in 2024-25.

In the same period capacity increased by 4.5% in 2022 and is forecast to increase by 5%, 6.35 and 5.2% in 2023-25. Only in 2021 did demand, at 7%, out-perform capacity growth at 4.7%.

According to Fossey Drewry had expected global container movements to pass the 1 billion mark, in 2027, but the pandemic and subsequent events such as the war in Ukraine has seen the consultants revise those forecasts to 935 million teu by 2035.

Related:Maersk and MSC to disband the 2M alliance in 2025

Senior analyst at Alphaliner Stefan Verberckmoes, is more optimistic pointing out that both Maersk and MSC are carriers that want their independence to make operational decisions, but that both carriers are still co-operating with each other.

“Both MSC and Maersk have announced independent services since the split of the alliance was announced,” said Verberckmoes, “2M was more of a vessel sharing agreement, and they both said now that they are stopping the vessel sharing agreement, they can start sharing vessels.”

Of course, this is not a new said Alphaliner Hapag-Lloyd already buy slots on CMA CGM’s FAL 3 service, which is the Ocean Alliance’s fifth loop, but Hapag market the service as the FE9.

He also pointed out that Maersk and MSC operate six Asia to North Europe loops and they have enough vessels to operate three loops each, while Verberckmoes does not believe that shippers require daily sailings out of Shanghai, Yantian and Ningbo, but that three a week would be acceptable.

In addition, with the IMO regulations on carbon intensity becoming more stringent, Drewry estimates that around 30% of the existing fleet will need to slow steam, that will reduce the effective capacity by around 7%.

Related:Container shipping market far from disaster territory: OOCL

Moreover, congestion at container storage depots around the globe could once again cause delays to repositioning containers and getting boxes to the shippers for loading.

Danny Den Boer, from container lessor Seacube, said, “Depot rates in Asia are significantly lower than in the US with the slowdown in manufacturing, but depots in the US, particularly on the West Coast are very congested.

Congestion at depots is not the only issue that is slowing the movement of boxes according to Fossey with the lack of maintenance and repair engineers also an emerging issue for the industry.

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About the Author

Nick Savvides

Europe correspondent

Experienced journalist working online, in monthly magazines and daily news coverage. Nick Savvides began his journalistic career working as a freelance from his flat in central London, and has since worked in Athens, while also writing for some major publications including The Observer, The European, Daily Express and Thomson Reuters. 

Most recently Nick joined The Loadstar as the publication’s news editor to develop the profile of the publication, increase its readership and to build a team that will market, sell and report on supply chain issues and container shipping news. 

This was a similar brief to his time at ci-online, the online publication for Containerisation International and Container News. During his time at ci-online Nich developed a team of freelancers and full-time employees increasing its readership substantially. He then moved to International Freighting Weekly, a sister publication, IFW also focused on container shipping, rail and trucking and ports. Both publications were published by Informa. 

Following his spell at Informa Nick joined Reed’s chemical reporting team, ICIS, as the chemical tanker reporter. While at ICIS he also reported on the chemical industry and spent some time on the oil & gas desk. 

Nick has also worked for a time at Lloyd’s Register, which has an energy division, and his role was writing their technical magazine, before again becoming a journalist at The Naval Architect for the Royal Institution of Naval Architects. After eight successful years at RINA, he joined Fairplay, which published a fortnightly magazine and daily news on the website.

Nick's time at Fairplay saw him win the Seahorse Club Journalist of the Year and Feature Writer of the Year 2018 awards.

After Fairplay closed, Nick joined an online US start-up called FreightWaves. 

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