DHL: Incoming capacity poses fresh challenges for ocean freight
- Written by The Bulletin
SINGAPORE - Media OutReach - 15 November 2022 - The DHL Ocean Freight Market Update Report November 2022 is now available. Below are highlights of the latest developments of the global ocean freight market in this monthly analysis by DHL Global Forwarding.
- Demand outlook - Various events such as war in Ukraine, the energy crisis and inflation are lowering consumer spend, and thus demand in goods. "With the downward shift in market rates, it is crucial to provide our customers with the best solutions to optimize their costs in the months to come," said Kelvin Leung, CEO, DHL Global Forwarding Asia Pacific.
- Capacity - With a huge number of new large containerships hitting the water in 2023 at a time of stagnating demand, the liner shipping market might be headed towards structural overcapacity which could impact profits.
- China - While port-related congestion issues in Europe and the U.S. have lessened, supply chain disruptions are continuing in China which show no signs of easing pandemic-driven restrictions, thus dampening both international trade and China's own economic growth.
- "We are closely monitoring the situation in China, and hope to see some loosening of the restrictions by next year. This would allow manufacturers to plan production and deliveries more efficiently. It would also boost growth and confidence in the important Chinese domestic market," added Leung.
- Economic outlook - The latest PMI surveys signalled that the downturn in global economic activity is showing no sign of relenting. Bennett Parrish, Global Economist at J.P.Morgan, added, "With demand weak, geopolitical and market volatility high, and inflationary pressures still elevated, the growth outlook remains downbeat for the remainder of the year."
- The eurozone economy looks set to contract in the fourth quarter given the steepening loss of output and deteriorating demand picture seen in October. The U.S. economy is also struggling with manufacturing activity growing at its slowest pace.
- Shifting rates - The combination of a lowered demand, along with growing capacity, has led to a drop in rates. Across many trade lanes, cargo volumes are weakening, and spot freight rates are projected to move back to pre-pandemic levels.
The DHL Ocean Freight Market Update is a monthly report by DHL Global Forwarding which tracks and analyses the latest developments of the global ocean freight market. Read the full analysis on DHL's Logistics of Things here.
Hashtag: #DHL
DHL – The logistics company for the world
DHL is the leading global brand in the logistics industry. Our DHL divisions offer an unrivalled portfolio of logistics services ranging from national and international parcel delivery, e-commerce shipping and fulfillment solutions, international express, road, air and ocean transport to industrial supply chain management. With about 380,000 employees in more than 220 countries and territories worldwide, DHL connects people and businesses securely and reliably, enabling global sustainable trade flows. With specialized solutions for growth markets and industries including technology, life sciences and healthcare, engineering, manufacturing & energy, auto-mobility and retail, DHL is decisively positioned as "The logistics company for the world".
DHL is part of Deutsche Post DHL Group. The Group generated revenues of more than 81 billion euros in 2021. With sustainable business practices and a commitment to society and the environment, the Group makes a positive contribution to the world. Deutsche Post DHL Group aims to achieve net-zero emissions logistics by 2050.
