Shippers rue contract deals as spot rates continue to tumble

Shippers are still feeling sore about contract rates as demand continues to weaken.

While carrier revenues may still be 2.8 times higher than pre-pandemic, volumes continued to fall during the second half of 2022 as severe economic headwinds battered demand.

A report from the Global Shippers’ Forum (GSF) notes that spot rates dropped 20% in the six months from June, with many shippers feeling “burned” by their decisions to commit to long-term contracts, and questions range over predictions of congestion and capacity shortages.

Forum director James Hookham said: “The second quarter saw the downturn in volumes turn into a sustained decline. These are conditions not seen in the container shipping market for over 10 years, with many shippers experiencing the behaviour of the market under such conditions for the first time.”

Lines have engaged in capacity management measures in a bid to arrest rate declines, as blanked sailings and slow-steaming become increasingly regular.