Update and Analysis of The Global Seafreight Market This Update and Analysis of the Global Seafreight Market is exclusively for DSV Air & Sea and made by Lars Jensen CEO and partner in Vespucci Maritime. Lars Jensen has 19 years of experience in the shipping industry and has for the last 10 years worked as an independent market analyst. September 24, 2021 Capacity problems not improving The newest data from Container Trade Statistics (CTS) shows that global demand growth in July slowed to just 1% compared to last year – and incidentally is also just 1% higher than at the same time in 2019. For all intents and purposes this is stagnant global demand. Seen as a headline such data could lead to the – mistaken – belief that this would also indicate that the supply/demand balance will soon become normalised and rate levels will decline again. Unfortunately, the underlying dynamics are not as simple as that and in all likelihood the situation will not improve in the short term. This is due to a number of issues which are intertwined, but it might be helpful to see the most important ones in isolation and then link them up. Element 1: Schedule reliability. Vessels in general clearly do not arrive on time. Roughly two out of three vessels are delayed, and the average time of delay is one week. This means that the situation has worsened in the past few months, bringing the performance essentially back to the same low levels as at the beginning of 2021. When vessels are lying idle outside a port, this is effectively the same as removing capacity from the global pool of vessels. In the past six months, more than 10% of the global capacity has been out of action due to such delays. In the latest month of data – July – this has become worse, not better. Element 2: Ad-hoc new niche services are being started on some trade lanes. This is done in three different ways. In some cases, it is existing carriers who do not usually operate in those trades who enter the market in order to tap into the very strong market – such as CU Lines or additional services by Matson. In some cases, it is freight forwarders who temporarily get hold of a small vessel in order to provide a service to their own customers while in other cases it is the importers
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