The geopolitical climate, not the ecological one, has lengthened the supply chain and contributed to the biggest-ever intermodal fleet on the high seas. It has also increased the volume of containers at sea, at least in the short term. That tide of prosperity could be about to turn. These were the opening themes at Intermodal Europe 2024, media partnered by WorldCargo News.
Rotterdam’s Ahoy Centre has become Europe’s newest container terminal – at least for the duration of the annual Intermodal Europe Conference and Exhibition. Doors opened early on Tuesday (12 November) to an eager audience. The emphasis was firmly on dealing with a disruptive global situation and the changing political trade winds.
Mixed economic indicators
Mark Bennett, the president of Sun Intermodal, hosted a keynote panel that discussed the downside of supply chain disruption but also the upside of a year of remarkable growth. Backing up that statement with a raft of economic indicators was Stefan Verberckmoes, now with French market intelligence specialists AXSMarine. Stefan returned to the opening day stage, in what’s become an almost annual address. Recapping on the size of the global fleet, which is well over 7,000 vessels and larger than ever, Stefan noted that cargo capacity is also at record levels, with over 30m TEU available.
Ships available is one thing, but Stefan noted that almost all of that fleet is on the high seas, with less than one per cent lying idle on any given day. That could represent a world trade position which is in remarkable health. However, other factors are in play, some of which are cause for caution.
Prices under pressure
The well-documented Red Sea disruption was, Stefan argued, forcing the need for additional capacity into the global supply chain. Longer trade routes, requiring more ships to be at sea for longer, equated to at least 840k TEU at sea, just to keep the trade routes ticking over.
Ship launches are up, too. An annual average of 1m TEU has, in the last three years, seen double or even triple that capacity coming off the slipways. “All these ships have been absorbed into the global supply chain,” said Stefan, noting that a rebalancing – between new launches and decommissioned vessels – was a few years down the line, and that would put downward pressure on container purchase and shipping costs.
Headwinds in all directions
Christian Roeloffs, the founder and MD at logistics and trading concern Container Xchange, proposed that container owners had much to consider for the coming twelve months. The physical disruptions to supply chains aside, he said that the changing political climate could blow either way, and traders need to remain vigilant.
An unexpectedly strong US economy and early seasonal ordering, as reported in WorldCargo News, has kept demand high. “Container prices and freight rates have remained high,” he said. However, agreeing with Stefan Verberckmoes, he was concerned that the recent surge in the supply of shipping and containers has left a structural overcapacity, that could unwind in the coming one to two years.
As widely reported, not least by WCN, ongoing industrial disputes (notably in the US) are an issue. Christian put that down to the automation issue, which shows little sign of resolution. The election of Donald Trump to the US presidency repeats the scenario of his previous term. The only certainty might be uncertainty over economic policy, and how that drives the western markets large. Geopolitics blow from both east and west. Will that drive or becalm WorldCargo? Either way, it will be news.