The container shipping industry is anticipating an increase in rates through the 2023 peak season as demand for freight is expected to recover in Q2 of 2023. According to the container price sentiment index (xCPSI), industry professionals’ short-term price expectations have turned from negative to positive in April, showing confidence building for the coming quarter. Despite the postponement of inventory replenishment cycles by retailers who overstocked, there is an expectation of a subdued rebound in demand as retailers begin to deplete their excess stock leading up to the peak season.
In terms of contract rates and negotiations, industry sources suggest that shippers may delay negotiations in May since the contract rates are still higher than the spot rates. Shippers are holding back to place themselves better during those negotiations. Additionally, there is an expectation of the reduction of contract tenures from one year to smaller time frames. Container xChange’s recent survey with supply chain professionals asked, “Do you think peak season in 2023 will be better than 2022 for the shipping industry?” 48% responded yes, 42% responded no, and 9% responded maybe.
1. Liner industry expects rates to climb through 2023, Inside Logistics, April 10, 2023. Accessed Apr 17, 2023.