Commercial Shipping in 2024
The commercial shipping industry has experienced both boom and bust over the past two years, moving from 2022's sharp spike in rates to an equally-sharp downturn in 2023. As 2024 unfolds, factors that could influence the development of the industry include geopolitical uncertainty, new environmental rulings and changing interest rates.
In this edition of the Bachmann Group blog, we share details revealed in recent industry reports that make predictions about the commercial shipping industry in 2024.
The majority of analysts are pessimistic about the possibility of an upturn in rates, blaming the 'continued imbalance' between supply and demand. One of the many organisations to reach this conclusion was Container xChange; their report for the coming year gloomily predicted that a combination of oversupply and reduced demand could result in lower profits and fiercer competition.
The 2024 forecast by international shipping association BIMCO was in a similarly negative vein, projecting that the average annual rate of growth in supply would be around 8.4% from now until the end of next year; the report added that ship demand would not seen a similar rate of growth 'even at the best of times'. Based on this data, BIMCO's report predicted that 'the weakening that began in 2022 and took hold in 2023 will continue also in 2024 and 2025'.
ING bank agreed that 2024 is likely to be a 'tough year' for container ships, noting that low rates have a dramatic impact of the performance of such vessels and that this is further aggravated by rising operational costs. Their report also pointed out that passing on costs to clients would not be a viable option in the current financial climate.
One of the only optimistic voices to be found was that of Patrik Berglund, the CEO of Xeneta. In the market analytics platform's Ocean Freight Shipping Report 2024, Berglund opined that the current rates are 'unsustainable' and so 'the question is WHEN they will go up, not IF they will go up'. He predicted that the most likely scenario is for rates to remain at around the current level for 'a little longer' before rising once again. "They will, for sure, go back up", he added.
It is clear that those involved in the commercial shipping industry must be prepared for a turbulent time and should be aiming to save precious funds wherever possible. This is where Bachmann Group can help. Since our company was established almost five decades ago, it has grown to become Europe's largest marine employment specialist and we are able to offer an industry-leading suite of services to the commercial shipping industry at the most competitive price.
Please browse our website to find out more about our commercial shipping services and do not hesitate to get in touch with our dedicated customer service team to discuss the unique requirements of your operation.