OCEAN FREIGHT MARKET UPDATE - DHL GLOBAL FORWARDING March 7, 2023
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UNCLASSIFIED (PUBLIC) OCEAN FREIGHT MARKET UPDATE DHL GLOBAL FORWARDING March 7, 2023
UNCLASSIFIED (PUBLIC)
Introducing our speakers…
Jacob Moe Vanya Dimitrova
Senior Vice President Head of Sales Strategy
Global Head of FCL and OCC, and Marketing,
DHL Global Forwarding DHL Global Forwarding
DHL Global Forwarding | Ocean Freight Market Update Webinar | March 2023 2
UNCLASSIFIED (PUBLIC)
2023 – What to expect?
• Demand is flattening out and signs of potential • Capacity being reallocated between trades as
Slow recovery on some tradelanes Capacity demand patterns change
recovery • Everyone watching post Chinese New Year fluctuations • Some services being blanked or discontinued
• Inflation in Europe & USA will dampen trade altogether
growth in first half of 2023 • Many ships require dry-docking & retrofitting to
• Inventories slowly declining comply with IMO2023
• Significant new capacity coming 2023-26 (+30%!)
• Long term rates being renegotiated in many trades
Rate
• Short-term rates ex-Asia have declined precipitously
volatility
& look to have bottomed out (CNY)
• Gap between long & short-term rates will narrow Service • Labour unrest in Europe & USA
in 2023 disruptions • High inventories & gradual easing of congested
port and hinterland complexes
Regulatory • More active interventions from FMC, EU & China
intervention MOT in relation to carrier/ alliance behaviour.
• Compliance with IMO2023 CO2 reduction
mandates will impact carriers’ fleets
DHL Global Forwarding | Ocean Freight Market Update Webinar | March 2023 3
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IMO 2023 – Implications for Carriers
Two new indexes are being introduced:
EEXI CII
(Energy Efficiency Existing Ship Index) (Carbon Intensity Indicator)
Rating system that assesses the energy performance of Efficiency ranking and monitoring of vessels
existing ships operational performance
• Based on the ship’s specifications, not its actual • Addresses actual vessel emissions in operation and
operating performance measures the emitted amount of CO2 per nautical
• To be assessed at the first International Air mile and per cargo capacity
Pollution Prevention Certification survey after • Annually, each vessel will receive a grade from A
January 1, 2023 (good) to E (poor)
• Non-compliant vessels that receive an EEXI rating • Ships with three years of D grades or one year
below a certain threshold may be subject to receiving an E grade will have to put a corrective
penalties and restrictions action plan in place
DHL Global Forwarding fully endorses the IMO 2023 regulation as a much-needed
framework to improve the carbon efficiency of marine shipping
DHL Global Forwarding | Ocean Freight Market Update Webinar | March 2023 4
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The end of the Alliances?
THE ALLIANCE OCEAN ALLIANCE 2M
HAPAG-LLOYD OOCL
ONE CMA CGM MAERSK LINE
YANG MING CHINA COSCO SHIPPING MSC
HMM EVERGREEN
DHL Global Forwarding | Ocean Freight Market Update Webinar | March 2023 5
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Will service levels increase?
Schedule reliability trending sidewards
• After a rapid increase in schedule reliability especially in the second half of 2022 SCHEDULE RELIABILITY (%)
reliability seems to be trending sidewards lately, with the MoM increase of a
85
marginal 0.1 percentage points to 56.6% in December. On a YoY level however,
reliability was up 24.8 percentage points. 80
• In December, schedule reliability improved in 26 of the 34 trade lanes when 75
compared to November, while remaining unchanged on Asia-Oceania. 70 2019
2020
• Reliability increased by 0.6 ptp on Asia-North America West Coast, reaching 65
2021
41.2%, and increased by 1.7 ptp on Asia-North America East Coast to 37.2% 60 2022
MoM.
55
• Asia-North Europe registered improvements by 4.0 ptp MoM to 51.8%, while 50
Asia-Mediterranean saw schedule reliability increase by 3.8 ptp to 57.9%.
45
• Schedule reliability increased by 0.8 ptp on Transatlantic Eastbound and
40
decreased by -0.6 percentage points on the Westbound trade MoM, reaching
49.8% and 37.3%, respectively. 35
• Asia-West Coast South America recorded the largest MoM improvement of 21.1 30
J F M A M J J A S O N D
ptp to 73.5%. On the other end, Africa-Asia recorded the largest MoM decline in of
-10.7 percentage points to 48.5%.
Source: Sea Intelligence, DHL
DHL Global Forwarding | Ocean Freight Market Update Webinar | March 2023 6UNCLASSIFIED (PUBLIC)
Ocean Freight Outlook Summary
Short Term
• Carriers continue blanking programs
• Drop of spot rates slowed down and reversed on some trades. Rate validities
remain very short
• Port congestions & equipment shortages ease, hinterland operations improve
Mid Term
• Carriers will do their utmost to manage capacity to handle lower demand
• Longer term contracts being signed
• Increased speed of vessel scrapping to eliminate inefficient and polluting tonnage
Long Term
• IMO 2023 is expected to have a 10% impact on the available capacity
• Major new deliveries are scheduled for 2023 and 2024
• Bounce back in demand on many trades potentially from Q2 with increased speed
in H2 2023
DHL Global Forwarding | Ocean Freight Market Update Webinar | March 2023 7UNCLASSIFIED (PUBLIC)
Recommendations for shippers
Consider fixed-rate agreements to secure sufficient capacity & price stability for critical lanes &
Fix
volume.
Hedge Consider setting aside non-critical volumes to take advantage of spot market cost savings.
Extend Incorporate extended lead times into your planning & budgeting.
Forecast Forecast accurately 8-12 weeks ahead and deliver consistently according to forecast.
Consider fewer logistics providers with multiple product, carrier, routing & pricing options to optimize
Simplify
visibility & flexibility.
DHL Global Forwarding | Ocean Freight Market Update Webinar | March 2023 8UNCLASSIFIED (PUBLIC)
Q&A SESSION
If you have any further questions, contact your usual Account Manager or Customer Service Representative
or visit us at dhl.com
Monthly Ocean Freight Ocean Freight Market
Market Update Outlook 2023UNCLASSIFIED (PUBLIC)
THANK YOU
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