Three predictions for shipping in 2022

1.Will the freight rate of the container shipping market continue to boom?

Most likely it will!

Sea-Intelligence, a well-known consulting agency in the industry, analyzed the cyclical changes of the China Export Container Freight Index (CCFI) from 1998 to 2019. In the downward range of the fluctuation cycle, the average weekly decline of the index was 0.6% to 0.9%.

Taking this as a reference, it is expected that it will take 18 to 26 months for freight rates to return to normal levels. Looking forward to the outlook of the container shipping market in 2022, the following factors will affect the trend of freight rates.

• Epidemic situation

  Under the epidemic, the surge in demand and the decline in supply capacity have continued the prosperity of the shipping industry.

  However, with the gradual easing of the epidemic, the productivity of overseas countries will recover one after another, the relationship between supply and demand will ease, and China's export substitution effect will weaken.

• International economic and trade environment

  The WTO predicts that the global export growth rate will increase by 4.7% year-on-year in 2022, maintaining a low growth rate, and the overheated commodity demand cannot be sustained for a long time.

• Dredging condition of overseas ports.

  Back then, it took more than half a year for the United States and Hong Kong to recover after blocking more than 20 ships.

• Transportation capacity supply.

  The epidemic has promoted the huge demand for shipping space and containers in the market, and prompted liner companies to book ships and make containers. However, when a large number of new transport capacity and new containers rush into the market, the demand has fallen from a high level, one ebb and flow, and the excess transport capacity may reappear.

• Business strategy of shipping company.

The previous business model of "withdrawing transportation capacity and ensuring transportation price" has enabled the liner company to obtain good benefits. If the supply chain is restored, the liner company is still likely to continue this measure.

2.Will the port congestion continue?

Yes, at least until the second quarter.

At present, the two major causes of port congestion are port control caused by the local outbreak of the epidemic and the poor turnover of the supply chain where the port is located.

Looking forward to 2022, the impact of the epidemic on global economy, trade and supply chain will be gradually reduced.

Problems such as poor supply chain turnover are also expected to be improved with the implementation of targeted measures. Charlotte Cook, chief trade analyst at vesselsvalue, said: it is expected that the demand for container transportation may slow down after the lunar new year in 2022, but the ship backlog will continue until at least the second quarter of 2022.

3.Global shipping industry revenue peaked?

"Unlikely to be better than the present"

According to Drury's statistics, the overall profit of the global consolidation industry will reach an amazing $150 billion in 2021, setting a record.

However, Moody's, an internationally renowned rating agency, predicts that after an excellent performance in 2021, the total EBITDA of the global shipping industry will decline in 2022. The agency said that the market situation of the shipping industry "remains stable", but it is "unlikely to be better than the current" in the next 12-18 months.