NEW data from Container xChange suggests the shipping industry is entering the third quarter with continued rate corrosion as negative market sentiment persists ahead of an “invisible peak season”.

A survey of freight forwarders in July found the majority of participants experienced a business slowdown in the second quarter of 2023, but anticipate better demand in the approaching peak season.

The online container logistics company Container xChange published the survey data and findings in its latest Container xChange Global Container Market Forecaster.

“The year 2023 started with significant oversupply of containers and high uncertainty in the market—which led to substantial rate erosion,” Container xChange co-founder and CEO Christian Roeloffs said.

“The average container prices have been freefalling and there are no signs of revival as we approach the busiest period in the shipping industry. It is quite evident that the peak season is almost invisible.”

Container prices

A study of how average container prices have developed for standard containers in the second quarter of 2023 suggested that most regions saw prices slide or increase marginally for standard containers.

There was no significant uptick in average container prices in the second quarter.

According to Container xChange data, only the Northern Europe, Middle East and the Indian Subcontinent saw an increase in average container prices on key routes (albeit marginal).

“As the world looks up to America for consumer demand, amidst rising prices, inflation and wage wars, the average container prices indicate no sign of revival,” Container xChange said.

“This in turn leads us to think that the demand for cargo or the need to reposition empties back to Asia is no longer pressing in that region.”

Container xChange said China, as “the most important destination for the westbound trade”, did not provide clear signal for the revival of containers.

Peak season demand forecast survey

Container xChange asked freight forwarders globally if their business slowed in the second quarter of 2023 as compared to the first quarter.

Around 65% of freight forwarders said their business was hit in the second quarter (compared with the first quarter), while 19% confirmed it remained the same with no uptick in business. Sixteen per cent said business had improved in that period.  

Sixty-four per cent of freight forwarders expected their business to pick up as the peak season approaches, but 21% did not and 15% were unsure.

Another indicator of subdued expectations from the coming invisible peak season is that the majority of freight forwarders confirm that they have experienced decrease in customer demand and customer activity in June.