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Shipping containers are unloaded from ships at a container terminal at the Port of Long Beach-Port of Los Angeles complex, amid the coronavirus disease (COVID-19) pandemic, in Los Angeles, California, U.S., April 7, 2021. REUTERS/Lucy Nicholson

Fitch: Container Shipping Outlook Deteriorates as Freight Rates Fall

Mike Schuler
Total Views: 3895
December 8, 2022

The container shipping industry is likely to see significantly weaker profits next year as freight rates continue to normalize, says Fitch Ratings.

Container freight rates have fallen sharply with supply chain pressure easing, which will lead to a weaker 2023 for liner operators compared to the past three years of the pandemic, the ratings agency said.

“The main risks for the segment include a potential harsher-than-expected recession and the continuation of pandemic-related lockdowns in China, leading to further weakness in demand and manufacturing. Though not likely, any port capacity restrictions in China in excess of lockdown-related production limitations could be positive for container freight rates,” Fitch Ratings said in a global shipping outlook update.

Meanwhile, prospects in the tanker and dry bulk sectors are “more stable,” as order books in those sectors remain at historic lows.

Fitch sees demand growth for oil tankers in 2023 similar to this year, as tonne-miles increase thanks rising oil exports shipped from Russia to China and India, which were previously supplied to Europe. Dry bulk volumes are likely to be “almost flat” thanks to lower steel production in China.

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