Hapag-Lloyd chief executive Rolf Habben Jansen has flagged the first signs of a recovery in container shipments for several months.
That points towards a “normal” peak season in the coming weeks as retailers stock up ahead of the end-of-year holiday season, he believes.
The boss of the German liner company told a webinar today that demand is starting to bounce back.
Destocking of inventories has meant weak demand for six to seven months, but demand has begun to recover in the second quarter, he said.
“Talking to customers, we still see pockets where inventories are elevated, but we see that they started to come down somewhat. In that context, I do expect an uptick in demand,” he said.
“Certainly looking at the last three to four weeks, we see the bookings have been stronger, now we have to see whether that will stay.”
Habben Jansen said the container shipping market has normalised and there is a good chance that freight rates will bounce back between May and August.
Spot rates are bottoming out on many trades and some have started to rise, he said.
Sustainable
Higher freight rates are needed because many spot rates had gone to unsustainably low levels, he said.
Labour costs, alternative fuel types and higher charter contracts pushed prices up.
Unit costs are likely to settle 25% to 30% higher than their pre-pandemic levels of $1,000 per teu.
Global container volumes were 40m teu in the first quarter of 2023, down from 42.9m teu in the same period last year.
But the turnaround in demand could lead to volumes this quarter around the levels seen last year.
“And I expect in the second half this year we will see some growth year on year.”
The global orderbook and scheduled deliveries mean supply will outpace demand.
But capacity might be limited by scrapping, slippage of deliveries and slowing down of ships to lower carbon emissions.
Some observers fear that a recession in Europe or the US would harm peak season demand, although it does not have to send freight markets into a downward spiral, according to analysts.
Even though a US recession is likely, destocking by retailers could mean a spike in container shipping and freight demand later this year, said Lee Klaskow, senior freight & transportation logistics analyst at Bloomberg Intelligence.
“We are in a freight recession right now [but] we could have freight growth and still be in a technical economic recession — that’s not unheard of,” he told the Freight Buyers’ Club podcast, produced with the support of Dimerco Express Group.
“So even if we do go into a recession, I don’t necessarily think it means doom and gloom.”
