13/3/2023

To our valued clients,

 

Last week saw the announcement by several shipping lines with their intention to increase rates via a Rate Restoration (RR) program from 1 April 2023.

 

Advertised quantum is USD 500/20’ & USD 1000/40’

 

Since early November 2022 industry has witnessed significant softening of shipping demand resulting in a progressive fall in shipping rates, which have now arrived at pre-pandemic levels.

 

A broad cross section of industries have been implementing aggressive inventory rationalisation programs which has seen large volumes of factory orders cancelled or significantly reduced.

 

Indications are that this, along with ongoing recessionary sentiment will result in a continued period of soft demand for the remainder of 2023.

 

This week’s announcements are seen as an attempt by the shipping lines to stem the losses that are mounting.

 

In the current environment the likelihood of this RR being successful in raising shipping rates (to that extent) is seen as speculative at best.

 

Our advice is to “WATCH THIS SPACE” and work closely with our team when finalising order and shipping programs heading into Q1 & Q2 of this coming financial year.

 

As we all continue to battle through challenging business conditions, our global procurement team is working closely with suppliers to achieve best outcomes for the remainder of 2023.

 

For further information and advice on this matter our sales and customer service teams are available to you at any time.

 

Best Regards

Michael Bourne - Director

 

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