Paired with a weak global economy, Hapag-Lloyd’s CEO Rolf Habben Jansen expects container rates to be in decline for some time. “Global demand is definitely slowing down at the moment, especially on the East-West trade,” says Habben Jansen on Thursday during a press conference. He said the question was when the market would stabilize and pointed out, “coming from the level where we were, it is not entirely unexpected.”
With the fall in volumes greater than the economic decline, Habben Jensen predicts that volumes will rise again. “We just need to see when that will rebound again, because no matter how long you look at it, it is very clear that the global economy is not down 10 or 20 percent. Things need to settle, and we are going through a transition period. The question is how long that will take,” he said.
He does not expect the fall in demand to be as strong next year as it has been in recent weeks. Instead, Habben Jensen anticipates that recent weeks’ decline in volumes “will recover – at least to some extent.” He said the size of global inventories were key to freight market development, however, it was not clear to what extent high inventories or weak underlying demand accounted for the fall in demand.
Habben Jansen believes the price development will adjust in the long run. ”In the end, it is very difficult to predict rates on the short term, but if you look a bit ahead – and also if you look at it historically – it is very unlikely that rates in the long run will remain below the cost level,” he said.
Source: ShippingWatch
