Well, that was unexpected. With some 3 million
20-foot-equivalent units (TEU) in new capacity poised to come
online in 2024, after 3 years of controlled capital spending,
carriers went into the year anticipating a reversion to the chronic
overcapacity that has long weighed on the industry's
profitability.
But market fundamentals changed drastically in November 2023,
when Houthi rebels in Yemen launched a campaign of attacks on Red
Sea shipping. Virtually overnight, 7-8% of global capacity was
diverted as Red Sea cargoes were rerouted around the Cape of Good
Hope. The move added two weeks to transit times along the Far
East-Europe lane and resulted in a 40% increase in emissions.
Schedule reliability, which had made a heartening recovery in the
latter half of 2023, reverted to around 50%.
