Conviction around a freight market recovery is rapidly fading, with carriers failing once again to push ahead with their planned rate increases on 1 June following the 2 failed attempts earlier in May. Freight rates have continued to slip with the SCFI falling by 6% over the last 4 weeks, with scant signs of any  reversal.

Zim retained its full year EBIT earnings guidance of $100m-500m despite suffering a first quarter EBIT loss of $14m. Carriers such as Zim are still hoping for a 2nd half recovery to boost the market, but Maersk has already warned that it expects a deterioration in its EBIT earnings for the rest of this year with no improvements in the freight rate environment.

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The top 12 carriers have collectively added 5% of additional capacity since January 2022 when spot freight rates peaked. The capacity growth has been uneven across carriers, with Zim recording the highest increase in percentage terms at 34.5%. Zim’s aggressive capacity expansion contributed to the significant deterioration in its first quarter earnings with an EBIT loss of $14m and net loss of $58m as it struggled to scale back loss making services to the US West Coast and Australia.

The most aggressive carrier remains MSC, who has added a massive 695,000 teu in the last 18 months, for a 16.3% growth, in stark contrast to its closest rival Maersk who dropped 168,000 teu for a 3.9% decline in capacity operated over the same period. MSC’s capacity operated stands at 4.97m TEU as at 22 May 2023, with its lead over Maersk rising to over 860,000 teu.

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