Without doubt, the covid pandemic and other world events have had a significant impact on the global ocean freight sector in recent times.
The latest monthly DHL Ocean Freight Market Update Report, released in November 2022, revealed a market that is stubbornly downbeat, which reflects a supply chain still under stress.
Looking at market demand first, various events including the devastating war in Ukraine, the energy crisis and strong inflation worldwide have had the effect of lowering consumer spend and therefore demand for imported goods.
Capacity issues have also come to the fore. With a large number of new 23,000+ TEU containerships due to be launched in 2023 at a time of stagnating demand, the liner shipping market is expected to hit structural overcapacity which, in turn, could impact on shipping company profits.
While port-related congestion in the US and Europe appear to have eased, supply chain disruptions in China continue – compounded by China’s reluctance to ease its pandemic-driven restrictions. This is dampening both international trade and China’s own economic growth.
Sea freight is directly impacted by the international economic outlook, and the latest PMI surveys reveal that the downturn in global economic activity is showing no sign of relenting.
All this is also impacting on shipping rates. The combination of a lowered demand, along with growing capacity, has meant a drop in rates. The DHL report states that across trade lanes cargo volumes are weakening and spot freight rates are expected to move back to pre-pandemic levels.
The history of sea freight
New Zealand’s sea freight industry has a long history. It is said to date back as far as 1794 when the British Royal Navy ship Fancy loaded 200 kauri trees for ships’ spars from Doubtless Bay in Northland and the Coromandel Coast.
A major leap forward took place 88 years later, on the 15th of February, 1882 when the first shipment of frozen meat left for Great Britain from Dunedin on the sailing vessel Dunedin – taking 98 days to reach London.
The world’s first container ship was a converted US World War 2 tanker that sailed from the port of Newark to the port of Houston in 1956, carrying a mere 58 shipping containers.
It would be some years before container ships were seen in New Zealand waters. In June 1971 the first all-container ship to visit New Zealand was the German-owned Columbus New Zealand.
In the decades since the 1960s, New Zealand’s economy, and indeed the global economy, has been shaped by the twin mega-trends of globalisation and containerisation.
This is an extract of the chapter. You can buy a print copy of the handbook here or a digital copy here
