MARCH Update

Sea Level: the ocean blog

Every month we provide a snapshot of the latest ocean market updates from our Market Intelligence ocean platform as well as some expert analysis from the Visibility Hub.

03/17/2023 | 5 min

Ocean Market Trends Europe – East Asia, March 2023

On the container freight market, Ex-China spot rates failed to recover after Chinese New Year, indicating inventory reductions are still not complete and demand continues to remain weak. 

Likewise, recent statistics show that the seasonal drop of Europe to North America container volumes was more pronounced than in previous years. 

Contract rates on most long haul trades continue their decline toward the spot rate level, closing the gap that opened after the spot rate decrease in the second half of 2022. 

With this normalization of rates at or moderately above pre-COVID levels, tendering and contracting activities are also returning to established patterns.  

Shippers that delayed tenders waiting for rates to fall are now increasingly going to the market to take advantage of the low Ex-Asia freight rates. Forwarder customers, pushed into quarterly agreements during COVID volatility, are able to transition back to yearly contracts. 

Meanwhile multiyear agreements signed at elevated 2021 and 2022 rate levels are causing some tensions between shippers and carriers, as some shippers push for reductions. 

Operational conditions are also improving, particularly after the Chinese New Year blank sailings set- backs. US East Coast ports and Inland Terminals are still experiencing some congestion, but waiting times are reportedly now less than one week.

A grab bag of smaller news items offers a glimpse at ongoing strategic repositioning underway by carriers: 

  • Maersk intends to sell off some non-core activities, including its container manufacturing and training division, underlining the shift away from a shipping-centered business model 
  • Maersk rival MSC has received its largest ship so far and also made a string of fresh second-hand vessel purchases, boosting their regional capabilities  
  • NYK (part of ONE) is selling its air cargo activities 
  • HMM’s state backed owners have announced intentions to sell their shares, returning the company to private ownership, but also flagging it as a potential takeover candidate 

Ocean visibility

Controlling your ocean shipments is all about getting timely information on possible upcoming delays.  

A large part of today’s critical supply chains is passing through at least one of the main maritime chokepoints. Think of the Panama Canal, the Gibraltar Strait, the English Channel, The Suez Canal, the Strait of Hormuz, the Malacca Strait and the South and East Asia Seas. This is the case for cargo flows between non-neighboring countries (NNC).  

The importance of the South China and East China Sea to global trade cannot be overstated as maritime trade passing through them both constitutes a large part of total world trade. High unit value goods are concentrated in Suez, Gibraltar and the English Channel because it represents a higher fraction of final goods. 

Shipping delays and port activity are coupled. For instance, when delayed ships arrive at a port unexpectedly, this will impact remaining port capacity, leading to a slowdown in the loading and unloading of goods. This may delay the turnaround time for incoming ships and can reduce the availability of other vessels and shipping containers for new shipments. Supply chain disturbances can always suddenly flare up due to a complex chain of cause and effect. 

Receiving warnings on ETA delays is therefore relevant in all situations both early and later in the shipment process. Transporeon Visibility Hub allows you to configure your individual views so that you get relevant information when such delays happen. 



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