“There will definitely be oversupply,†he highlighted
on the latest episode of The Freight Buyers’ Club podcast. “It’s a
question of trying to control the level of oversupply. So definitely there will be more blank sailings. We think there
will be industrial use of cancelled sailings which will significantly reduce
the predictability of container ship departures.Damas predicted that box lines
would collectively record profits of around US$20 billion this year, but the oversupply of vessels would result in a
collective loss of US$15 billion in 2024.
How individual lines manage supply will largely depend
on whether management’s priority is protecting market share or the bottom line.
He predicted that the next year would be an ocean
freight buyer’s market, and shippers would be able to secure significant rate
cuts next year, but not as large as the reductions most negotiated in 2023.
“But,†he warned, “there will be a price to pay which is that the service
reliability and service level of carriers will probably worsen.â€
In 2024, shippers will also need to contend with new
EU Emission Trading System (ETS) surcharges from carriers. Damas said
beneficial cargo owners (BCO) at present had very little transparency as to how
ETS would be fairly passed on by container lines.