In the first article of Sunday Spotlight issue 574, the Danish maritime data analysis company Sea-Intelligence examined the evolution of the average distance traveled by a loaded TEU, as well as its impact on global vessel tonnage.
The underlying data comes from Container Trade Statistics (CTS), overlapped with the company’s calculations of sailing distances and TEU*Miles.
Sea-Intelligence started with head-haul sailing distances and saw a sharp drop during the initial phase of the pandemic, followed by a quick recovery in the second half of 2020.
This high level was maintained until early 2022, after which there was a noticeable decline. Assuming constant sailing speeds, an increase in sailing distances would also result in a commensurate increase in the need for vessel capacity.
At the start of the pandemic, the need for vessel capacity fell by more than 6%, which was countered by blank sailings from carriers. As the market recovered, the sailing distance effect resulted in the need for 1% more vessel capacity, over and above any impact contributed by the increase in volume itself. This effect was fairly stable from mid-2020 to January 2022. However, since February 2022 the effect has shifted and turned negative. The latest figures for May 2022 show a negative impact of -1.0%.
If we also consider regional trades, Figure 1 then shows the impact on the need for additional vessel capacity.
During the pandemic market disruptions in the period from mid-2020 to January 2022, the distance impact was the need for 2.1% additional capacity – over and above any capacity injection needed to meet growth of trade in itself.
However, developments in 2022 have shifted to negative and in May 2022 we now see an impact on distance, where there is now a reduced need for vessel capacity by -3.4%, as a consequence of the reduction in distances.
“As the current market is clearly on a downwards trajectory in terms of supply/demand balance, this shift in sailing distance impact once more becomes an added element, pushing the development – this time downwards,” Alan Murphy, CEO of Sea-Intelligence pointed out.
