European Maritime Logistics: Overcapacity and Subdued Demand Sink Freight Rates

Maritime logistics are grappling with a new reality characterized by plummeting market freight rates, with rates down over 80% from their Covid-19 peak level. We believe freight rates will deteriorate further with the risk of breaching below pre-COVID-19 mean as the influx of new tonnage and re-entry of ships from reduced congestion could exacerbate an already oversupplied market. Also, demand for maritime logistic services appears lackluster owing to the need for deeper inventory destocking.