We forecast that container volumes will grow 3-4% in both 2024 and 2025 and thus slightly faster than the global economy. We expect head-haul and regional trades to grow marginally faster than the total. As volumes during the first half of 2023 were relatively weaker than normal, we expect the 2024 market to grow faster in the first half of the year.
We forecast that import volumes in East & Southeast Asia, Europe & Mediterranean and North America will see average annual growth during 2024 and 2025 of 2.6%, 2.8%, and 3.5% respectively. Import volumes in the Indian Subcontinent & Middle East, Sub-Saharan Africa and Central & South America are meanwhile expected to grow faster than average.
As head-haul and regional trade lanes into the Indian Subcontinent & Middle East, Sub-Saharan Africa and Central & South America are longer than the average, ship demand will grow 0.5 percentage points faster than volumes in 2024.
As already mentioned, we are further estimating that ship demand during the first half of 2024 will grow by an additional 10% due to the Houthi attacks on ships in the Red Sea. Should the situation not be resolved by the end of the first half of 2024, ship demand will remain higher than our forecast for as long as the situation persists.
Risks to economic growth have subsided both because inflation is falling faster than previously expected and because growth remains steady. However, container volume demand risks remain.
US consumers continue to spend more and save less than they did before the pandemic. It must be expected that personal savings rates will eventually return to pre-pandemic levels, which could hurt spending on goods. It is, however, possible that consumers could maintain spending and still increase savings if interest rates begin to fall.
US elections could also have a negative impact on trade. If re–elected, Trump has vowed to increase tariffs on Chinese imports, which will impact trade between China and the US. Unless replaced by trade from other Asian countries, this would hurt overall demand in Transpacific trade.
The contract for longshoremen in US east and Gulf coast ports expires in late September 2024. To protect against the risk of strikes there, some shippers could decide to send more containers via west coast ports. As the average sailing distance to the US west coast is shorter, this would result in lower demand for ships. A complete breakdown in negotiations seems unlikely, but should it happen, it could wreak havoc on supply chains.
The water level in the Gatun Lake that supplies the Panama Canal locks is still projected to fall further. However, the Panama Canal Authority has just increased the number of daily transits as both current and projected water level is higher than previously expected. Container ships continue to use the canal without significant challenges other than the draught restrictions which reduce the cargo intake on ships. Nevertheless, a worsening of conditions could still force rerouting of ships and cargo.
Source : BIMCO
