shippingposition
  • Home
  • News
  • Editorial
    • Vox Pop
  • Maritime safety
  • Oil and Gas
  • Personality
  • Health
No Result
View All Result
shippingposition

Home » Fitch Predicts Port Congestion Will Prevent Container Shipping’s Return to Normal in 2022

Fitch Predicts Port Congestion Will Prevent Container Shipping’s Return to Normal in 2022

by Joshua
June 20, 2022
in Coast To Coast

Fitch Ratings is calling for another solid year for container shipping industry earnings as port congestion will continue to prevent a return to pre-pandemic levels. For shippers, this means high shipping costs and supply chain challenges are here to stay, at least in the near-term.

FITCH

The container shipping industry earned a “mind-bending” $59 billion in profits in the first quarter of 2022—a new record—as the industry to benefit from stronger pricing.

Container shipping company profits are likely to have another very strong year in 2022 as freight rates remain high despite moderate easing these last three months, the credit ratings agency said in a global container shipping update issued Monday.

High freight rates along with buoyant demand have led to an increase in the fleet orderbook, which is about 26% of the existing fleet, compared to less than 10% at the beginning of the pandemic, Fitch said. However, the industry could be headed for a turning point in 2023, when growth in vessel capacity is likely to exceed container demand.

“The capacity deployment discipline during the peak periods of pandemic-related lockdowns in 2020 was partly the result of industry-wide consolidation in the previous decade, as it reduced the need to gain market share. However, whether this discipline holds with the arrival of new fleet remains to be seen. Some of the excess cash from the ongoing bumper profits has gone to debt reduction, but increased capex, shareholder returns and bolt-on acquisitions have been the other uses across the industry,” Fitch said.

Read Also:  US President Biden Signs The Ocean Shipping Reform Act Into Law

Fitch sees acquisitions as a result container shipping companies’ push to become door-to-door logistics providers as being good for the longer-term growth and stability of the industry.

While China’s COVID lockdowns have helped to ease port congestion, lingering congestion in key markets in the United States and North Europe will continue to keep freight rates high and prevent a return to normalcy, at least in the near-term.

“Most of the freight rate increases over the last two years were driven by increase in port congestion as a result of pandemic-related operational bottlenecks and higher demand due to consumer spending shifts to non-perishable goods and away from services. Port congestion remains an issue in both the US and European ports. Chinese lockdowns, although leading to lower container volumes for February-April 2022, have not been sufficient to ease the congestion.

“Union issues at ports and the arrival of peak season for container volumes means congestion issues are unlikely to be resolved in the near term. If port congestion continues into 2023, it could partly absorb the new vessel capacity due to be delivered in 2023,” Fitch’s update said.

shippingposition

Kindly like us on Facebook


Tags: Fitch

Related Posts

Mawani Grants SGP Four 20-Year Port Concessions

Mawani Grants SGP Four 20-Year Port Concessions

June 30, 2025
Ningbo-Zhoushan Container Volumes Hit New Record In H1

Ningbo-Zhoushan Container Volumes Hit New Record In H1

June 30, 2025
IMO Agrees To Start Revision Of Outdated Regulations For Nuclear-Powered Ships

IMO Agrees To Start Revision Of Outdated Regulations For Nuclear-Powered Ships

June 30, 2025
Ships Near Hormuz Sending Unusual Messages to Deter Attacks

Ships Near Hormuz Sending Unusual Messages to Deter Attacks

June 30, 2025

Latest News

NPA Bags NASS PAC Transparency Award

NPA Bags NASS PAC Transparency Award

July 12, 2025

Nigeria Customs Says Claim Of Form ‘M’ Migration Charges False

CRFFN Showcases Reform Milestones, Dismisses Court Ruling Misinterpretation

NCMDLCA Faction Distances Self from Amiwero’s Court Action, Backs CRFFN on POF Collection

Customs Intercepts ₦9.2bn Worth of Fake Bedroom Booster, Others

Customs, NAFDAC Inaugurate Implementation Committee for 2024 MoU

Nigeria Customs Intercepts Container with Over 10,000 Donkey Genitals

Senate Hails Adeniyi’s Election as WCO Council Chair, Says It’s  a Major Win for Nigeria’s Global Trade Leadership

Oyetola Launches Door-to-Door’ Diplomacy for Nigeria’s IMO Council Bid

FG Urged To Link Warri-Itakpe Rail To Inland Ports, Road Networks

Red Sea Operation Rescues 4 More From Cargo Ship Sunk By Houthis

Shippers’ Council Set to Establish Border Information Centre at Idiroko, Bolster Trade Efficiency

kindly like our Facebook page

Health

Contraceptive Pills Can’t Cause Cervical Cancer – Expert
Health

Contraceptive Pills Can’t Cause Cervical Cancer – Expert

June 30, 2025

Mrs Roseline Akinlabi, Adolescent and Youth Sexual Reproductive Health Desk Officer, Osun Primary Healthcare Board, says contraceptive pills cannot cause...

ONIONS: The Good Old Healing Vegetable

KNOW YOUR BODY PARTS: The Liver

June 16, 2025
ONIONS: The Good Old Healing Vegetable

ONIONS: The Good Old Healing Vegetable

June 16, 2025
Why Prostate Disorder Cases Are Increasing Among Nigerian Men – Experts

Why Prostate Disorder Cases Are Increasing Among Nigerian Men – Experts

June 1, 2025
20m Nigerians Live With Mental Health Issues, Says WHO

20m Nigerians Live With Mental Health Issues, Says WHO

June 1, 2025
Health Facts You Didn’t Know

How Your Habit Affects Fertility

May 19, 2025
Fruits For Raining Season

Fruits For Raining Season

May 19, 2025
See Mental Illness Like Other Treatable Diseases – Says Suicide Survivor

Health Facts You Didn’t Know

May 19, 2025
Alligator Pepper: Benefits, FAQ, Side Effects, & Warning

Alligator Pepper: Benefits, FAQ, Side Effects, & Warning

April 28, 2025
Water And Health: The Relationship That Helps Life

Water And Health: The Relationship That Helps Life

April 28, 2025

© 2021 Shippingposition

Navigate Site

  • Home
  • About Us
  • Contact us
  • Privacy Policy
  • Sitemap
  • Terms

Follow Us

No Result
View All Result
  • News
  • Coast To Coast
  • Oil and Gas
  • Maritime Education
  • The Terminals
  • Maritime safety

© 2021 Shippingposition