Liner operators continue to struggle with the deterioration of the supply-demand balance, affecting freight rates. Compared to 2022 and 2019, the fleet increased by an average of 5% and 19%, respectively. However, container volumes decreased by 2% compared to 2022 and increased by only 1% compared to 2019. So far this year, container volumes have fallen nearly 2% year-on-year, with average freight rates following the decline, with freight rates reaching 2019 levels in September. Chartering costs are still 25% higher than in 2019, making actual charter costs higher for liner operators as they still have to pay much higher** to charter new vessels.
Although the cost of very low sulphur fuel oil has decreased by 29% compared to 2022, it is still 5% higher than 2019 levels. For ships with scrubbers, heavy fuel oil** was down 22% compared to 2022, but 22% higher than in 2019.
On the other hand, the more lucrative long-haul** has fared better, with year-to-date volumes and current freight levels 6% and 16% higher than 2019 levels, respectively. However, the fleet is expected to grow by another 9% in 2024, putting further pressure on the market. As a result, freight rates** may be difficult to achieve, but time charter rates are likely to continue to decline. Niels Rasmussen, chief shipping analyst at BIMCO, said: "The average cost of chartering a new ship has fallen 73% year-on-year so far this year, but is still 65% higher on average than in 2019 and 25% above the 2019 average in December.
The actual charter costs for liner operators are even higher, as they still pay for time charters entered into in 2021 and 2022 at a much higher rate**. ”
So, while the balance of supply and demand is deteriorating, liner operators are still struggling to cope with all this. They are working to reduce costs, increase efficiency, and find ways to respond to growing market pressures. However, the road ahead may remain challenging due to many factors such as uncertainty over fuel costs, charter costs, and freight rates.