Freight rate war forecast at TOC Asia

TOC Asia, organised by TOC Worldwide, returned to the Marina Bay Sands in Singapore last week after a two-year absence. The event, reported on by World Cargo News, brought together APAC’s port and container supply chain community. Delivering a keynote speech at TOC Asia in Singapore under the topic of “Singapore – A Global Enabler for Maritime Trade,” PSA International’s Group CEO, Tan Chong Meng, described how the company had shifted from a network of ports to networked corridors to offering solutions. These solutions are designed to support customers from source to destination, and Meng spoke of PSA’s initiative to build customer “adjacencies” that connect digitally.

The session ’Market Outlook: How is the Industry Evolving to Become More Resilient?’ focused on the outlook for container shipping. As demand declines there is much interest in whether and to what extent container shipping can retain something close to the high level of profitability carriers have enjoyed over the last two years. There is some optimism that a combination of supply chain congestion, IMO 2023 requirements and the wider “decarbonisation” in the industry will help support a “new normal” where there is a better long-term balance between supply and demand.

Alan Murphy, CEO and Founder of Sea-Intelligence and long-time industry analyst, poured cold water on this idea and doubted carriers will have the discipline to manage down capacity of the global fleet as demand falls.

“What I personally think is much more likely is we’re in for a rate war,” he said, putting an 80% chance on a rate war.