The container shipping industry is quickly adjusting to a post-COVID-19 environment, perhaps too quickly considering all the challenges endured in the past two years of supply chain “disorder.” Despite historically high logistics costs for provided services that deteriorated to also be the most historically unreliable, as volume demand slowed in 2022, the industry is swiftly returning to pre-pandemic habits. Shippers are more than willing to seek lower price options to move their goods, which are less in demand on top of high inventory levels. Ocean carriers are also willingly lowering spot price levels with hopes of maintaining vessel utilization at acceptable levels with more effective supply becoming available, as vessels are no longer loitering around US ports waiting for berth space. We have clients who were looking for space at premium pricing at the beginning of 2022 now seeking lower spot prices instead.
Even with relatively strong holiday sales, US importers are not expected to meaningfully increase their orders in spring 2023. Such prospects will continue to press shipowners to lay up ships, including delaying delivery of new vessel orders. With high inflation and interest rates and recessionary economic conditions in the US to prevail for at least the first half of 2023, the container shipping industry will see all of its players — from beneficial cargo owners, asset operators, and non-asset service providers — step back into their tripartite relationship.
The brokering role of non-asset players such as ourselves will be even more important in 2023, especially in the contract process and throughout seasons to offer more wide-ranging options, which have become more critical if any lessons were learned in the last two years. One key concern that will continue to linger and potentially and adversely affect the industry heading into 2023 will be unending labor tensions with both US West Coast dockworkers and Class I Railroad unions.