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Sea-Intelligence: Vessel utilization remains low

Sea-Intelligence: Vessel utilization remains low


Danish shipping data analytics firm Sea-Intelligence reports that global demand continues to decline, putting the supply-demand balance under pressure whether we calculate the growth of TEU*Miles in 2019 or on an annualized percentage basis.


The latest demand data from Container Trade Statistics (CTS) showed that in August 2022, the annualized growth rate for 2019 was lower than the 2019 level, which means that vessel utilization will be low unless carriers significantly reduce capacity.


"As we have repeatedly shown in our Sunday Maritime Intelligence report, nominal utilisation rates for the trans-Pacific route need to remain above 92-93 per cent in order to maintain exceptional spot rates, while the threshold for the Asia-Europe route is 85 per cent," the analysts noted. They went on to explain, "Trans-Pacific route utilization fell below 90% for most of 2022, acting as a catalyst for sustained freight declines. In August this year, utilization exceeded 90%, but only just broke through and remains below the 92% threshold, indicating a rise in interest rates." In Asia and Europe, the decline has been even steeper, analysts say. "As we can see in Figure 1, utilisation on the Asia-Europe route in 2022 has been below the 85% threshold that triggers rate increases, and although utilisation increased to 74% in August from 72% in July, the rolling 2-month average fell further from 76% to 73%," they said.


Alan Murphy, CEO of Sea-Intelligence, commented: "This latest data simply reaffirms what has been the case since Spring 2022, which is that there is no underlying structural support for high freight rates on trans-Pacific and Asia-Europe routes."


Shenzhen Xunlaitong specializes in shipping export from Shenzhen to Australia & New Zealand, Germany, Netherlands and more business