LONDON: The war in Ukraine, escalating global energy and food prices, and acute inflationary pressures are negatively impacting on the container shipping industry, with Drewry forecasting a further downturn in the trading outlook for 2023.

According to Drewry’s recently published Container Equipment Forecaster, the fleet of container equipment in service is forecast to decline by 3% next year.

In response to a slowdown in container shipping cargo demand, Drewry is further downgrading its projections. It notes that shipping lines are idling more tonnage and vessel scrapping is rising. These factors mean fewer shipping containers are needed and this comes at a time when surpluses of over 6 million TEU are estimated to be in the fleet.

 According to Drewry, ‘ageing containers are now being sold into the secondary market at an accelerating pace as both ocean carriers and, particularly, lessors address overcapacity and organise their container pools so that they are brought back into line with existing and short-term demand and vessel capacity projections.’ 

Drewry also highlights that factory stockpiles of empty containers in China rose to more than 750,000 TEU by the end of September and these numbers are likely to increase further. As a result, the appetite to order new containers is ‘extremely weak’. 

 Drewry forecasts that production will fall ‘drastically’ in 2023 as ‘few owners are expected to expand their fleets and not every container being retired will be replaced with a new one.’ 

Globally, Drewry suggests the pool of equipment in service will decline from 50.8 million TEU in 2022 to 49.3 million TEU in 2023, and production will slump to an estimated 497,000 TEU – a number only slightly above that recorded in 2009.

On a more optimistic note, Drewry says it expects the market to rally and annual newbuild output to recover to the 4.4-5.2 million TEU range over the period to 2026, 

with replacement requirements accounting for over 50% of production in all years.