The global shipping market adjusts its capacity layout, and the charter market may usher in a turning point

Faced with the continuous bottoming of global container shipping prices, Mediterranean Shipping Company (MSC) took the lead in launching a capacity restructuring strategy. According to the latest industry trends, the company has suspended the trans-Pacific Mustang route service and transferred the 24,000TEU ultra-large container fleet configured on the Asia-North Europe route to regional routes such as the Mediterranean-West Africa route. At the same time, the Ocean Alliance (OA) postponed the new Asia-North Europe route originally scheduled to start in March, and the Premium Alliance also postponed the opening plan of two trans-Pacific routes in May.

This series of capacity deployment actions reflects that the industry leaders are responding to market fluctuations through supply-side reforms. Although spot freight rates have fallen by more than 30% from their highs at the beginning of the year, container charter rates remain high and resilient. Industry insiders pointed out that as carriers scale back their capacity expansion plans, the charter market may end its 26-month upward cycle.

The latest research by Flexport, an international logistics platform, reveals that the ratio of the current container charter rate index to the China Container Freight Index (CCFI) has exceeded the historical threshold. Although the two indicators have been positively correlated for a long time, the price gap has continued to widen since the beginning of 2024 due to the reconstruction of routes caused by the Red Sea crisis. It is worth noting that after a similar divergence occurred in 2016, charter rates plummeted by 40% within 6 months, and the pressure of adjustment in this round of cycles deserves vigilance.

The latest quotation of Drewry World Container Index (WCI) on March 6 showed that the global comprehensive freight rate of 40-foot container fell by 3% month-on-month to US$2,541, and fell by 34% from the peak in January. Among the main trade routes:

Market analysts believe that the lack of cargo volume recovery after the traditional Spring Festival and the concentrated delivery of new ships have led to the failure of the expected rebound in freight rates in March. Futures market data show that contract prices continued to fall in the second quarter, reflecting the spread of bearish sentiment in the market.

As the global shipping market enters a period of deep adjustment, the capacity reconstruction measures of the leading shipping companies indicate that the industry is shifting from expansion to refined operations. Although there is still downward pressure on freight rates in the short term, this round of adjustments is expected to lay the foundation for the long-term healthy development of the market. The charter market is facing a cyclical turning point and may usher in a new round of rate revisions, which provides charterers and carriers with an opportunity to re-evaluate resource allocation.

At the same time, market fluctuations are also testing the industry's adaptability and innovative spirit. Emerging trends such as digital transformation, green shipping and multimodal transport may become the key for companies to cope with challenges and seize opportunities. Although the current market sentiment is cautious, the long-term growth potential of global trade is still considerable, and the shipping industry is expected to usher in a more stable development cycle after adjustments.

We will continue to pay attention to market trends, provide customers with forward-looking analysis and customized solutions, and help them seize opportunities in the changing global shipping landscape.