The Valencia Containerised Freight Index (VCFI) increased by 5% in April compared with March
Between April 2021 and April 2022, the Index doubled from 2,315 points to 4,654 points. The growth is attributed to the current economic situation, marked by extreme volatility which affects the behaviour of the market and the supply-demand pairing for maritime transport.
The port of Valencia noted a significant dip in international trade, citing data provided by the consulting firm Linerlytica. Mainly this was attributed to the drop off in Chinese demand after a fresh Covid-19 outbreak caused shutdowns and disruptions to operations across several major ports in the country. Port calls at Shanghai and Ningbo-Zhoushan have nearly halved in recent weeks. These ports account for about 35% of all export cargo out of China.
Western sanctions on Russia in the aftermath of the war in Ukraine caused disruptions to European port traffic. The port added there is a fall in confidence levels and consequently consumer consumption.
Port congestion remains an issue. Linerlytica reports global port congestion increased by 1.4% during April, with 3.4M TEU representing 13% of the total fleet. North America (30%), north Asia (29%) and northern Europe (11%) remain the most affect regions. The pull of import demand from North America and the disruptions in China are major causes.The commercially inactive fleet remained at a minimum: mid-April, 55 vessels were idle with a total of 180,653 TEU representing 0.7% of the total active fleet, showing a drop month-on-month from March which recorded 59 idle vessels.
Freight capacity in the USA and Canada rose (in Canada’s case by 10%) due to the boost in import demand and in the east coast Africa (an 8% increase), as a direct consequence of the serious flooding caused by heavy rains, which has forced port activity to come to a standstill, leading to the accumulation of large quantities of containers.
The energy market continues to be affected by the war in Ukraine and the Covid-19-related disruptions in China. Brent crude reversed its upward trend, decreasing by 5% from March, down to US$101. And data provided by Ship & Bunker stated that very low sulphur fuel oil prices in April rose to US$925 from US$916 in March.
Shipbroker Braemer Shipping Services notes that as of 1 May, the global fleet capacity on order stands at 7.5M TEU breaching 30%. The broker said the TEU capacity on order is the highest recorded and the last time the capacity on order represented 30% of the trading fleet was in late 2011.
Net fleet growth, in terms of TEU capacity for 2022, is estimated to be in the region of 4%. For 2023 and 2024, the annual average net fleet growth is expected to grow 10% per year.
