The Weekly Roar

In this week’s Roar: dropping demand and capacity, space on the world’s largest ship, new ships (do we need them?), positive labor news, and the air cargo outlook.

Between August and November of this year, container volume from China to the US dropped 21%. And according to recent data from the CNBC Supply Chain Heat Map, there’s been a 40% drop in US manufacturing orders in China. The result? Carriers are continuing to suspend services and increasing the number of blank sailings. Overall, three alliances have cut vessel capacity by 40-50% until the Chinese New Year.

Yet ironically, at a time of dwindling demands and overcapacity, new tonnage is entering the marketplace.

The first weekend of December saw the brand-new 24,004 teu Ever Atop make its maiden voyage. But in a sign of the times, it is sailing light. It’s just one of 10 new A24 carriers for Evergreen, and one of three new container ships that are the largest afloat, in terms of capacity. Introducing extra capacity into the market at a time when blank sailings are on the increase may lead to a downgrade in earnings forecasts for Q4.

Despite all this, discussions about new builds continue, with at least three carriers planning orders at Asian yards. This includes Evergreen, who is in negotiations for a series of ships ranging from 15,000 to 17,000 teu.

Now for some positive news—contract talks are set to begin next year between the International Longshoremen’s Association and port employers who represent workers on the East and Gulf Coasts. Separate from the current West Coast negotiations, the ILA is confident that a new six-year contract will be negotiated quickly. This assumption is based on the success of the 2018 contract talks between the ILA and the US Maritime Alliance.

Finally, in air cargo, it too is struggling with a changing climate—or at least one that’s normalizing. Shipping volumes have decreased by 18% from last year as passenger travel increases. Recent data from the International Air Transport Association shows a drop of 13% in demand in October alone when compared to 2021. Having said that, volumes and revenue are still better than they were in 2019, pre-pandemic. Another important data point is that air volume is influenced by what’s happening in e-commerce and ocean freight. And much of that is a direct result of the economy.

For the rest of the week’s top shipping news, check out the article highlights below.