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IPFS News Link • Supply Chain Disruption

No precipitous plunge in container shipping rates, just 'orderly' decline

• Freightwaves

There's an old Greek shipping saying that goes: "Ninety-eight tankers and 101 cargoes, boom. Ninety-eight cargoes and 101 tankers, bust." This doesn't translate so well into modern-day container shipping because the consolidated liner sector manages the number of ships in service a lot better than the fragmented tanker business.

Tanker spot rates can plunge violently lower when supply exceeds demand. One of the big questions for container shipping has been: Will spot rates plunge precipitously after demand pulls back, as it has in the past in bulk commodity shipping? Or will there be a gradual decline toward a soft landing?

So far, it looks gradual. Trans-Pacific rates have steadied in July and early August. In fact, some indexes show spot rates ticking higher again.


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