Page 18 - Annual Review 2021 full

Indian National Shipowners’ Association

world’s container shipping fleet found itself lacking In the midst of 2021, there was tightening on the
and unable to meet demand and that has led to a supply-side and availability of containers reduced
huge rise in freight rates. A combination of healthy to the lowest on record. At the current moment, the
demand volumes, extensive port congestion and market is being driven by high demand for goods
shippers facing order backlogs has driven up the combined with inventory rebuilding.
container market on key trades far beyond anything
witnessed before 2021. Container index

The global maritime sector has been suffering from
a shortage of shipping containers since the onset
of the pandemic. The disruptions caused by the
pandemic to the worldwide supply chains have
resulted in an imbalance in the supply of shipping
containers. The uneven rebound in trade across
regions, the delays and congestion at ports, and
therefore the re-routing of container ships have led
to this worldwide shortage of shipping containers.
This resulted in time and price overruns, pushed up
freight rates, and raised worries about the rise in the
cost of inputs/goods and inflation. Shortages in raw
materials and inventories on account of shipping
constraints are adding to cost pressures. Dry Bulk
The bulker market has had a very positive 2021,
This current bull-run is fueled by a chronic shortage with earnings rising to 13-year highs. The demand
of ships and the absence of any other credible rebound from 2020’s COVID-19 disruptions. The
alternative. Furthermore, sky-high freight rates grain and minor bulk trades like cement and clinker
not only outline the ongoing pressures within the have been up and port congestion has also had a
supply chain and urgency from end-users but also clear impact on demand for bulk ships. The bulk
provide the financial incentive to find a ship to earnings averaged $37,379/day in August 2021,
satiate the demand. more than double the 2020 average along with a
firm market across all segments.
Currently, freight rates are rising and period
durations that the ships are running are lengthening, Going forward, it has been forecast that the current
which is further draining the supply side. At some state of the order book will mean low growth
point, we can expect that the rates will stop rising, in the dry bulk fleet in the next couple of years.
analysts believe that such a period will correspond Plus, as one of the ways to comply with EEXI and
to when the pressures on the networks ease, CII requirements will be to slow steam, this will
port congestion falls, and schedules flow more also reduce vessel supply. This along with broad
smoothly. This will also be when freight rates soften demand across almost all commodities – 2022 is
from their extreme levels. expected to be good for bulk shipping.

Currently, massive structural changes have Bulk index
occurred as we witness participants having to
reconfigure their strategies – both by trade and the
shipping lines. However, analysts have forecast
headwinds building in 2023 both from a supply
deluge and new environmental regulations that will
change the way the industry operates.

Baltic Indices Jan 25 Jan 24 Jan 21 Jan 20 Jan 19
Baltic Dry Index 1343 -48 1391 -24 1415 -59 1474 -96 1570 -74
Baltic Capesize Index 745 -91 836 -55 891 -140 1031 -195 1226 -90
Baltic Panamax Index 1988 -25 2013 +3 2010 -14 2024 -71 2095 -128
Baltic Supramax Index 1693 -35 1728 -11 1749 -24 1773 -39 1812 -28
Baltic Handysize Index 1065 -24 1089 -14 1103 -19 1122 -17 1139 -23

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