Supply chain managers expect freight demand recovery in the Q2 of 2023, according to the recently published market forecast for April by Container xChange.
The container price sentiment index (xCPSI), a sentiment analysis tool by Container xChange that concurrently surveys supply chain professionals on their short-term price expectations, continued to show negative readings until mid-March.
At the beginning of April, the results were at an all-time high as the index started showing confidence building for the coming quarter, the report noted.
“The global container logistic ecosystem is like a spider’s web. One disruption does not linearly impact the knot. Instead, every disruption reverberates across the web—sometimes in unexpected directions. The increase in FED rates, the banking sector crisis, the strikes might seem concentrated in one region, but they have their impact across all trade lanes,” shared Christian Roeloffs, CEO, of Container xChange as he commented upon the current state of the container shipping industry.
With regard to labor negotiations, the report noted that industry sources reveal negotiations, which are due in May, might cause shippers might delay these since the contract rates are still higher than the spot rates. So, the shippers are holding back to place themselves better during those negotiations, the report states.
It also explains that another expectation is the reduction of contract tenures from one year to smaller time frames.
Commenting on the outlook for the rest of the year, Christian Roeloffs shared further, “Despite avoiding a global financial and economic recession for now, the shipping industry is experiencing a freight recession due to the postponement of inventory replenishment cycles by retailers who overstocked. As we look ahead, we anticipate a subdued rebound in demand as retailers begin to deplete their excess stock in the coming months, leading up to the peak season.”
