The Covid-19 crisis has undoubtedly shattered the traditional cycles of containerised maritime shipping. After 18 months of soaring prices, freight rates began to fall in early summer. This trend is continuing, even though ahead of the Christmas holidays the peak season is usually in full swing at this time. The start of autumn has arrived, but the market remains sluggish in terms of new orders from Asia.
Major retail chains carried out massive stock replenishment in 2021 and early 2022. For the moment, against the backdrop of a slowdown in consumption, this availability of goods in Europe makes it possible to satisfy demand in a timely fashion.
We have to be aware, however, of a possible reversal of the trend at the end of the year. If stocks fall back below levels that could lead to missed sales, major retailers may find themselves in the position of having to place large orders simultaneously.
Companies are familiar with these retail mechanisms. In addition, they have learned lessons from the leaner years. We can count on them to finely manage capacity in this period of economic slowdown, by using a program of blank sailings which could then coincide with the resumption of retail procurement. Securing profits in 2022, on the part of shipping companies as well as mass distribution, is therefore an explosive cocktail that could quite easily make maritime freight rates swing in the other direction.
Shipping companies will not increase their sailing speeds. As a result, services will remain slow and average times of 100 to 120 days will be maintained in the coming months between the order made to the supplier in Asia and the goods being delivered to a North European warehouse. There is no credible return in the short term to 40 to 50-day transit times.
More than ever, shippers must therefore remain vigilant on this aspect in the development of their Supply Chain strategy.
It is true that the overall trend in freight rates is downwards, but the situation is contrasted across trades, so we have to be wary of shortcuts.