Carriers warn of difficult start to 2023
With China’s Lunar New Year falling at the earliest possible date in 2023, carriers are warning the first few months of the year are unlikely to see much improvement in market conditions.
Commenting as a guest at the presentation of the Port of Los Angeles’ latest throughput figures, ONE CEO Jeremy Nixon said he believed Chinese factories could stay closed for as long as four weeks instead of the usual two weeks next year due to the timing of China’s New Year holiday which next year starts on January 22.
The extension would inevitably further impact transpacific volumes which have already fallen steeply (24% y-oy in October). Although Nixon said he believed spot rates would rise in 2023, the Singaporebased executive predicted a “soft January, February and March”.
The comments echo earlier observations by CMA CGM, which indicated the line was pinning its hopes on US demand picking up after the early Lunar New Year as large inventories were cleared.
Were this to occur, this would allow carriers to regain some bargaining power for the annual transpacific contract negotiations in early May.
Capacity growth to beat volume growth
Meanwhile, a more upbeat outlook by Hapag-Lloyd at a press briefing last week talked only of a short-term recovery in demand towards the end of the year and up to the Chinese New Year. Looking further forward, the German carrier predicted a 1% increase in global container volumes in 2022, rising to just 2% in 2023.
Next year’s growth will be offset by the increase in container capacity, which Hapag-Lloyd is predicting at 4%. Port congestion was also down more than 9% in November compared to its peak in June, according to the carrier.
Port of Los Angeles hit by blank sailings
Underlining the drop in demand, volumes at the Port of Los Angeles declined to 639,344 teu in November, a drop of 21% on the same month in 2021, as the port was hit by both labour talks and falling
The port recorded 13 blank sailings in November, and expects a further 11 blankings in December, confirmed executive director Gene Seroka.
The Port of Long Beach also saw November volumes drop 21% yearon-year to 588,742 teu. Imports plummeted 28%, while exports increased 14%.