MARKET UPDATE

OCEAN
Mar 2024
CEVA OCEAN MARKET UPDATE: MAR 2024
Ocean Market News
Red Sea: Rates highest in 16
months
Recent reports from Ti and Drewry show that
although global rates were stable in 2023, the
disruption on the Red Sea has pushed rates to their
highest level in over 16 months.
Ratings agency, Fitch, showed that rates on Asia-
Europe routes have increased by 285% since
October 2023.
The diversions around the Cape of Good Hope have
increased shipping companies operating costs by
almost 50%.
Rates could stay higher for longer impacted further
by the Panama Canal challenges, inflation in
operating expenses, higher port charges and the cost
of meeting environmental regulations which will all
cut carrier profits. These factors could all help prop
up freight rates even when the Red Sea crisis is over.
Source: XENETA, ALPHALINER
Transpacific spot rate boost, just
in time for contract season.
The Drewry WCI shows a decline in spot rates from
Asia to Europe over the past 5 weeks, but from Asia
to US the rates are much firmer.
The Asia-Europe trade is more directly impacted by
the Suez diversions, hence pricing hikes.
Although the Panama Canal constraints have
pressured the Asia – ECNA lane, the fact that US
economy is igniting with a rise in job growth, inflation
falling much faster than expected and consumer
confidence the highest in 2 years show that the lane
is one of the few where demand is growing and
supply is being carefully managed.
Source: DREWRY
Non-operating owners’ fleet:
more ship additions than
deletions.
According to Alphaliner, fleets of NOOs in
small/medium sizes [700-9000 TEU] have seen more
vessel additions than deletions in the past 10 months
as fleet replenishment gathers momentum. This
reverses the trend of NOO decline which began in
August 2020 when carriers started raiding the
second-hand boxship market.
Although the replenishment of the NOO fleet is
tangible, it remains insufficient to offset the tonnage
lost to end users during the past 3.5 years.
There is reluctance for NOOs to create new ship
orders, mainly due to vessel prices, financing issues,
fuel choices & propulsion, lack of charter covers and
overcapacity fears.
The renewal and replenishment of the NOO fleets
must continue to build a modern, high spec and
energy efficient carrier market that Carriers require
when adjusting tonnage needs.
Source: ALHPALINER
GLOBAL ECONOMY: OCEAN

Global Indicators
Purchasing Industrial Production Semiconductor Customer Confidence
Manufacturing Index Index Sales Indice
The S&P Global US Manufacturing PMI Industrial Production in the United States The Semiconductor Industry Association The University of Michigan consumer
was revised upward to 52.2 in February decreased 0.23 percent in February of (SIA) announced global semiconductor sentiment for the US was revised
2024 surpassing a preliminary of 51.5 and 2024 over the same month in the previous industry sales totalled $47.6 billion during higher to 79 in January 2024 from a
January’s 50.7. year. the month of January 2024 preliminary of 78.9, the highest since
July 2021.
The Caixin China General Manufacturing China's industrial production expanded This is an increase of 15.2% compared to
PMI was up to 50.9 in February 2024 by 7.0% year-on-year in January- the January 2023 total of $41.3 billion but a Consumer Confidence in China increased
from 50.8 in the prior two months, beating February 2024 combined, faster than a decrease of 2.1% from the December 2023 to 88.90 points in January from 87.60
market estimates of 50.6. It was the fourth6.8% growth in December 2023 and total of $48.7 billion. points in December of 2023. Consumer
straight month of growth in factory activity
beating market forecasts of 5%. It was the Confidence in China averaged 109.90
and the strongest pace since August 2023. fastest expansion in industrial output in Regionally, year-to-year sales were up in
points from 1991 until 2024, reaching an all
almost two years, boosted by robust China (26.6%), the Americas (20.3%), and
time high of 127.00 points in February of
The HCOB Eurozone Manufacturing PMI activities in manufacturing, utilities and Asia Pacific/All other (12.8%), but down in
2021 and a record low of 85.50 points in
was revised higher to 46.5 in February mining. Japan (-6.4%) and Europe (-1.4%). Month-
November of 2022
2024, up from a preliminary estimate of to-month sales were down across all
46.1 and compared with January's 10- Industrial production in the Euro Area markets: Asia Pacific/All Other (-1.4%), the The consumer confidence indicator in the
month high of 46.6. The latest reading plunged by 6.7% year-on-year in Americas (-1.5%), China (-2.5%), Europe (- Euro Area rose by 0.6 points from the
signalled the second-slowest deterioration January 2024, marking a stark reversal 2.8%), and Japan (-3.9%). previous month to -15.5 in February
in manufacturing sector conditions since from the downwardly revised 0.2% growth 2024, in line with preliminary estimates.
March 2023, with Germany driving the recorded in December and faring much Across the European Union as a whole,
overall deterioration and contracting the worse than market projections of a 2.9% consumer sentiment went up by 0.4 points
most in four months decline to -15.8 thanks to consumers’ less negative
views regarding their household’s past
financial situation and their intentions to
GT2:GOV make major purchases, which were partly
2 Year 4.63% +87 (1 year)
offset by lower expectations about the
general economic situation in their country.
GT10:GOV
10 Year 4.00% +88 (1 year)

SOURCES: World Economic outlook IMF; semiconductors.org; tradingeconomics.com; STATISTICA:

Bloomberg.com
 Ocean Freight Indicators
Capacity: Consistent increase in TEU capacity – YOY
increase 6.2%, QoQ surging by 12%. MOM increase modest
at 1.7%. Capacity still remains below the peak of June 2022,
a decline of 8.5%

Demand: Modest increase with global volumes rising by

1.2% in Q4 2023 boosted mainly by Asia Pacific volumes
maintaining a solid 4.0% increase compared to the previous
year, suggesting that demand-side pressure is easing up
gradually

Rates hypothesis: Headhaul rates up 153.6 index points.

Average cost of shipping 40ft container on major global
headhauls increased from $1411 in November 2023 to
$3,864 in February. However, the rates are slowing in 2024-
a rise of 86.9% in week 1 Jan, shows a week-on-week
average increase of just 5.9% in the following 5 weeks.

SOURCES: ACCENTURE, DREWRY

 Ocean Freight Rates
Drewry World Container Index
▪ Drewry’s composite world container index
rose 51% YoY in Jan 2024.
▪ On 8 Feb 24, Drewry reported the WCI
dropped by 1% to $3,786 per 40ft container,
but compared to the same week last year
has risen 90%
SOURCE: DREWRY; XENETA; SSE.NET
Shanghai Containerized
Xenata Shipping Index Freight Index SCFI
▪ The Global XSI index posted its biggest ▪ On 9 Feb 2024 the SCFI stood at 2166.31
month-on-month increase since June 2022, ▪ This shows a drop of -51.41 based on the
rising by 4.3% in February to 154.4 points.
previous week
▪ This is only the second month in which the
XSI index - the average of all valid long-term
contracts - has risen over the past year and
a half.
 OCEAN MARKET UPDATE MAR 24

Global Ocean Freight Trade Lane Growth – December 2023

Global demand is at -4.2% YTD v 2022

North America MEA & S.ASIA LATAM Europe APAC Africa

Export -4.1% Export -5.0% Export -5.6% Export -7.9% Export -3.2% Export -3.3%
Import -12.0% Import +2.8% Import -0.9% Import -5.8% Import -3.5% Import +5.0%
Total Trade -9.9% Total Trade -0.6% Total Trade -2.9% Total Trade -6.7% Total Trade -3.3% Total Trade +2.8%
SOURCES: ACCENTURE OCEAN DASHBOARD
 OCEAN MARKET UPDATE FEB 24

Global Ocean Freight Trade Lane Growth YTD vs 2019

Shows growth of 1.3% based on a YOY comparison

North America MEA & S.ASIA LATAM Europe APAC Africa

Export -17.2% Export 4.6% Export -2.8% Export -13.4% Export 8.1% Export 5.0%
Import 5.5% Import 3.5% Import 11.5% Import 1.6% Import -4.1% Import 4.7%
Total Trade -2.2% Total Trade 3.9% Total Trade 5.0% Total Trade -5.7% Total Trade 3.2% Total Trade 4.7%
SOURCES: ACCENTURE OCEAN DASHBOARD
OCEAN FREIGHT MARKET CAPACITY

Global Schedule Reliability – January 2024

Amidst the Red Sea crisis, global schedule reliability
decreased by -5.1 percentage points M/M in January
2024 – the same M/M drop as in December 2023 – to
51.6%
This drop means that the January 2024 schedule reliability was the lowest since September 2022..
On a Y/Y level, schedule reliability in January 2024 was -0.8 percentage points lower than in
January 2023

Due to the round-of-Africa sailings, the average delay for LATE vessel arrivals deteriorated further,
increasing by 0.59 days M/M to 6.01 days.

CMA CGM was the most reliable top-13 carrier in January 2024 with schedule reliability of
54.7%. Wan Hai was next with schedule reliability of 54.5%.
The remaining carriers all had schedule reliability of 40%-50%, with Yang Ming the least reliable
carrier with schedule reliability of 42.2%.
In January 2024, the difference in schedule reliability between the most and least reliable carrier
was the lowest since February 2023.
Because of the current Red Sea crisis, and due to significant delays on the round-of-Africa sailings,
none of the top-13 carriers were able to record a M/M improvement in schedule reliability in January
2024, with the M/M declines ranging from -0.9 percentage points (Wan Hai) to -13.2 percentage
points (Maersk).
On a Y/Y level, 7 of the 13 carriers recorded an increase in schedule reliability, with Wan Hai
recording the largest - and only double-digit - improvement of 10.4 percentage points.

SOURCE:SEA INTELLIGENCE
 Weekly Capacity Development Transpac Eastbound
Asia-NAEC Asia - NAWC
▪ Decreases in week 14 ▪ Decrease in week 13 and 15 ▪ On the backhaul, decrease in week 11
▪ Increases in week 19 ▪ Increase in week 22 ▪ Increase in week 14

Weekly Capacity Development Far East Westbound

Asia-Med Asia – North Europe
▪ Increase in weeks 14 and 22 ▪ On the backhaul, increase in weeks 14 ▪ Decrease in week 11 ▪ On the backhaul, increase week 14
▪ Drastic increase in week 20. and 19 ▪ Increase in week 15 ▪ Decrease weeks 16 and 17
▪ Decrease in week 17

SOURCE: SEA-INTEL CAPACITY OUTLOOK

OCEAN FREIGHT MARKET CAPACITY

Weekly Capacity Development for Asia-LATAM

Asia- East Coast South America

In the Asia- East Coast South America

trade lane the weekly capacity
decreased significantly in week 15 and
22, increased in week 20. On the
backhaul, the weekly capacity decreased
in week 11 and increased drastically in
weeks 12 and 14.

Asia – EC
South
America

7.7% Y/Y

SOURCE: SEA-INTEL CAPACITY OUTLOOK

Weekly Capacity Development for Asia - ISC

CEVA solution
Asia – ISC

The weekly capacity decreased drastically in week 14, increased in week 17. From Asia – ISC
ISC-Asia trade lane the weekly capacity decreased in week 12 and 15, and
increased in week 19

Rates
Freight to both India West Coast & East Coast remain elevated from the Pre-CNY
rush. This is in line with expectations as vessels are full and overbooked till end
Feb'24.
Capacity
Space is currently tight in Feb'24 due to Pre-CNY rush coupled with aggressive
blank sailings. With the factories in China closing in early Feb'24, shipping lines
have planned for sharp reduction in capacity in week 6.
17.3% Y/Y

SOURCE: SEA-INTEL CAPACITY OUTLOOK

OCEAN FREIGHT MARKET CAPACITY

Weekly Capacity Development for Transatlantic

Westbound
North Europe - NAEC
The weekly capacity increases drastically in week 11 and
13, and decreases significantly in week 14.
The NAEC-N.Europe trade lane shows increase in weekly
capacity in week 12 and a decrease in week 13.

North Europe
– N. America
EC

-4.6% Y/Y

SOURCE: SEA-INTEL CAPACITY OUTLOOK

 CEVA LOGISTICS
Ocean Freight Market update

Disclaimer
Market and
Industry Data

This presentation includes estimates of market and industry data and forecasts that
we obtained from publicly available industry publications, surveys and forecasts that
we believe to be reliable, however we have not independently verified any of the
data or forecasts from these sources or the economic assumptions relied upon in
such sources.

13
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