The global container market grapples with a growth setback amidst a sluggish global economy.
The container market has encountered sluggish growth in tandem with a lower-than-expected global economy, as revealed by the latest update from BIMCO. Despite the International Monetary Fund’s (IMF) initial projection of a 3.5 percent average annual growth for 2020-2023, the actual global economy only achieved a modest 2.6 percent growth rate. Niels Rasmussen, Chief Shipping Analyst at BIMCO, notes that the container market expanded at a mere 0.4 percent annually during this period, reflecting a GDP multiplier of just 0.14. This stands in stark contrast to the 2013-2019 period, where the GDP multiplier averaged 1.06.
The impact of the COVID-19 pandemic further exacerbated the situation, with the global container market experiencing a meager 1.5 percent growth from 2019 to 2023, totaling 173.5 million TEU. Without the pandemic, this figure would have surged by 24.6 million TEU to reach 198.1 million in 2023. Moreover, the multiplier between regional GDP growth and container import volumes dwindled across all regions during 2020-2023 compared to the previous period.
Particularly alarming is the negative multiplier observed in the East & Southeast Asia and Europe & Mediterranean regions, resulting in decreased import container volumes by 2023. A significant portion of the lost growth, amounting to 11.4 million TEU, was concentrated in these two regions.
Rasmussen speculates on the potential for pent-up demand and global economic recovery to mitigate some of the lost growth in the coming years. However, current forecasts for global economic growth do not signal a significant resurgence. The container market’s future trajectory hinges on various factors, including economic trends and recovery efforts, as the industry navigates through unprecedented challenges.
