October 28, 2025 • 38 mins
The outlook for the global container rates isn’t encouraging for fleet owners, with supply expected to outpace demand next year. The Trump administration’s protectionist policies are only complicating matters for the industry. In this Talking Transports podcast, Peter Sand, Xeneta’s chief analyst, joins Lee Klaskow, Bloomberg Intelligence senior transportation and logistics analyst, to share his outlook for the liner market. The backdrop will weigh heavily on rates in 2026, with spot declines outpacing longer-term decreases. Though not Xeneta’s main scenario, a reopening of the Suez Canal would increase capacity by about 10-15%, putting additional pressure on rates. Sand also talks about USTR and China port fees, air-freight markets, emerging trade lanes and his love for death metal.
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Episode Transcript
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Speaker 1 (00:07):
Hi everyone, this is Lee Clasgow and we're Talking Transports.
Welcome to Bloomberg Intelligence Talking Transports podcast. I'm your host,
Lee Klascow, Senior Freight Transportation Logistics Salles at Bloomberg Intelligence,
Bloomberg's in house research arm of almost five hundred analysts
and strategists around the globe. Quick public service announcement before
we dive in. Your support is instrumental to keep bringing
(00:29):
great guests and conversations to you, our listeners, and we
need your support. So please, if you enjoy this podcast,
share it, like it and leave a comment. Also, if
you've got ideas, feedback, or just want to talk transports,
I'm always happy to connect. You can find me on
the Bloomberg terminal, LinkedIn or on x at Logistics. Lee,
(00:51):
I'm very excited to have with us today. Peter Sand
Chief analyst at Sanata, a position he's held since joining
the firm in twenty twenty one. To Sanetta, Peter spent
over a decade at Bimco, where he's responsible for analyzing
commercial markets based on the global economic situations and its
influence on tree. He also previously worked at ds Nordon,
(01:12):
a Danish shipping company. Operating in the dry cargo and
tanker segments worldwide as a senior analyst. Welcome to Talking transports, Peter.
It's good to see you again.
Speaker 2 (01:22):
It's amazing to be and could come your good company
lie and always have it to talk transports.
Speaker 1 (01:27):
All right, So Sanatta, you know it's not spelled how
it sounds. It starts with an X. Why don't you
tell people a little bit about the firm?
Speaker 2 (01:36):
Yeah, I mean, now, we're basically also here to disrupt,
not in the way that the supply chains are disrupted
on a daily basis, but we are pretty new kids
on the block of being around for some twelve thirteen years,
and basically our mission is to transform the way that
freight in the form of container shipping and f freight
is bored and sold. So we seek to be the independent,
(01:59):
neutral voice in the industry that allows all our industry
partners and customers basically to dive into the ocean and
air of market intelligence and benchmark how they are performing
when they're when they buy and sell freight. So so
in an autill that's that's what we're all about. And
we're constantly, of course trying to improve on what we
(02:21):
did yesterday recently acquiring also Easy also a household name
for those working within container shipping. I'm sure, of course
on our trail to to bring even an even better
platform around.
Speaker 1 (02:36):
So are you guys a freight forwarder.
Speaker 2 (02:38):
Not at all. We are basically here for mainly the
largest shippers of the world, those with the most complex
supply chains, those in need not only to select the
right carrier or select the right freight forwarder, but also
to benchmark the carriers against one another and against a
raft of of key indicators. Just about to launch a
(03:03):
carrier score card for basically doing that. But no, we're
not handling freight like that, but we are empowering our
customers to do their job even better, to improve their
decision making. Of course, critically, as we move into the
fourth quarter of twenty twenty five, now a lot of
shippers with a stake in EUROPEA now getting their feet
(03:27):
into the contract negotiations with the largest carriers and forwarders
of the world. So you better prepare yourself for negotiations
like that. And that's where we bring in say the
neutral and the neutral basically market the intelligence so they
can talk about the services rather than rip each other
off with misquotations.
Speaker 1 (03:49):
And so your customers are the capacity owners, the shippers
and the forwarders exactly.
Speaker 2 (03:56):
We basically seek to deal with or you may say,
three parties of the logistics, the ship as b c os,
the forwarders and and the carriers bread and Butter being
being the b c os from from a starting point,
but but recently of course also we we have a
(04:16):
high profile within index link contracts. Of course we we
do our own index and and in order to have
an index you need to be trusted by either party
because then of course without that trust you you can't
really agree on on what's the right index to do
your contract right. So so that's h that's basically the
(04:38):
element of trust that we could put in between all
parties of of.
Speaker 1 (04:42):
The industry and uh Zentrara is it's it's a privately
held company, are you private equity, venture capital, it's founders,
who's who owns the company?
Speaker 2 (04:54):
Yeah, it's a little bit of all the things that
you mentioned there. So so we still have Patrick Workland,
co founder and CEO of Seneta as as leading the pack.
We have we have a solid solid board and full
with with with with experts into not only sas, but
(05:15):
certainly also logistics and and and and moving off cargo
in every single aspect. So so we try to move
forward and our ambition, of course is to get that
that unicorn evaluation at that some point in time. So
so that's what we work hard on to do every
single day. And I'll say it's a it's really a
(05:36):
tough job, but we're also on the right track, so
so well we'll keep crying on all right.
Speaker 1 (05:42):
And you know, Peter, one of the main reasons why
we want to have you on is Zenna and I
guess yourself and your team you recently put out your
twenty twenty six outlook for the liner market. Kind of
can you talk about the major takeaways from your your
report and your expectations as we, you know, head into
next year.
Speaker 2 (06:01):
I think it's always relevant to to to share our
thoughts on that as a part of the Senate's thought
leadership in global logistics. So obviously we set the scene
as early as we can, which is often around our
large customer summit that that is held in Well, this
year we went to to Barcelona and that's basically where
(06:22):
we where we sneak peak for the customers. What do
we expect to be the factors that will impact the
container shipping market and f right for that matter, But
for my area of expertise it's ocean only. We go
into those elements that will make break or shake the
(06:43):
market the next year. Of course, the Red Sea disruption
is the one elephant in the room uh and for
all practical purposes, but also because we still believe so
regardless of the the Gaza ceasefire Gaza Agreement that that
is now coming into into play, our expectations are still
(07:05):
for no large scale return of carriers to the Red Sea.
So as also being outspoken about what are assumptions, because
in the end of the day, that's of course the
underlying metrics that means the most to to to a
forecast that seems to be one again once again heavy
on the on the fleet size, where carriers are taking
(07:30):
delivery of more capacity than our forecast of demand actually
requires them to do so. So in that account, we
are moving into an area where supply will exceed that
of demand and our expectations are thus rates to to
come down from from where they have been most most
recently spot rates down more than than those of long
(07:53):
term container rates partly due to a mismatched mismatch in
in in revenue and cost of the carriers. And we
can more about that in a minute, but at least
that's that's our world forecast to fundamental weakening that will
bring rates down from from where they have recently been. So,
but of course, always with a caveat black sworms can
(08:14):
still come about in various forms and geopolitics. I think
it's probably the one fact so that we that we
expect the most significant disruption to to to come from.
Speaker 1 (08:25):
And so you know, your your assumption is, you know,
as you mentioned, based that the Sewez Canal is not
going to open up, or at least carriers or or
ship owners will still avoid it. What has to happen
for you know, that to change in your mind? Obviously
we don't know if the rec piece deal UH in
(08:46):
the Middle East is going to hold, hopefully it does,
so you know what has to happen for acid owners
to be more comfortable with going through the Suez.
Speaker 2 (08:57):
Yeah. I like the fact that you also point to
a sid owners because in the end it very much
rests on insurance companies being able to cover of course,
the assets Holland machinery, but certainly also cargo and crew
of course, so until that happens for for all, we
(09:17):
see no large scale return. But having said that, I
mean we know that that contin ships also do transit
the Babel Mandeb straight in the southernmost part of Red Sea,
but also seuis Cannal to the extent of some fifteen
to twenty percent if you go by numbers as compared
to pre Red Sea disruptions. So there is still business
(09:38):
carried out there, but those are smaller niche players, not
the top ten carriers for the lions of their networks.
Even though we also know that CMACGM, the French carrier
under the protection of French Navy, ships do transit occasionally,
but it's not something that you can that you can
(10:00):
say expect going forward. So so what what is really
needed is a small peace in the Middle East, the
wider Middle East region. It's it's been going in the
wrong direction for more than two years now, uh, And
I think it's fair to say that the international shipping
is an unfortunate collateral damage being held hostage by the
(10:20):
hoothy rebels in particular, but it's all a part of
the bigger, more complex and network in the local power
interest of Iran, Saudi Arabia, Israel. And then we just
got the hoothy rebels also. So that's why we, whenever
we had have the chance, put the attention to the
fact that that don't put your hopes up high. Even
(10:42):
though it's much welcome to to see now this is
fire in Gaza, there's still many more steps and roads
to to walk before we get to a point where
we can say, okay, Houthi rebels will present no material
risk to international ship and particular containerships and also gas
(11:03):
carriers that have shied away. Car carriers also to almost
one hundred percent extent will return.
Speaker 1 (11:09):
And so you know, you mentioned a part of your
analysis you believe supply growth is going to outpaced demand.
That's driven by that, you know, the order book and
obviously I'm assuming tepid demand. Do you have a spread
in terms of what that you know, how many percentage
points or basis points are you guys expecting supply to
outpaced demand?
Speaker 2 (11:28):
Yeah, for sure, our expectations for demand growth in twenty
twenty six is right around three percent. We expect the
fleet to grow by three point six percent so now,
so it's not by massive difference that we that we
measure over capacity to grow in twenty twenty six. And
that may actually be the positive spin to what comes
(11:52):
about in twenty twenty six, because if we look further ahead,
you and I only that we got the world's largest
container shipping order book right here, right now, we have
more than a thousand container ships, more than ten million
t use on order, and that will be delivered in
twenty twenty seven and mostly in twenty twenty eight. So
say the supply side is basically stacked against carriers in
(12:15):
the foreseeable future. And if we are to, let me
give you an example of how significant that is, because
we got a fleet right round seven thousand ships, thirty
two thirty three million TU. But in order to offset
the entire ty of the order book, you need to
demolish or scrap every single container ship built prior to
twenty ten. It will never ever happen. But just to
(12:39):
put in the year scale of this, we have twenty
twenty six now where the difference between demand and supply
is the smallest it has been for a long time.
We had the COVID years, crazy strong on demand due
to basically the American consumers going absolutely about us and
(13:01):
a lot of congestion in the wake of that, and
all of a sudden we saw, hey, let's uh, let's
let's get back to what once was normal. And then
around comes ret see right, So so there's always something
to to to manage, always triggy triggy supply chains. And
that's basically also why a disrupted like the Red Sea.
I think it's it's it's worthwhile to pay attention to
(13:22):
the fact that that shipping is so much more than ocean.
It's also rail, it's also truck, it's also air and
various combination of that. Right so, so early in the
Red Sea crisis we saw the invention of of c
and air combinations to to get goods into to Europe
faster than than than would otherwise be the case. Why
(13:45):
I do buy for instance. So so all that kind
of i'll say, reinventing the wheel so to speak, has
been coming into force. But for twenty twenty six, probably
one thing that we hear from most chippers is that
they are looking more to ocean freight than that of
air freight. Uh. And it comes from from from various places,
(14:07):
but of course, not least because air raid is so
much more expensive, and cost cutting is an initiative. It's
an initiative that you hear from from left, right and center.
So and speaking of demand, speaking of as a economic changes,
often you see container shipping being very much about Europe
and North America, but North America for sure. I have
(14:30):
been in reverse with the Trump administration setting up barriers
to trade, in particular against China, so so so that
in itself have brought around some some staggering numbers to
the table, and then just to bring forward what we
see now into twenty twenty six, this have resulted in
(14:53):
a lot of changes to the trade batons. So if
I'm just to throw a few numbers that you here,
if we look at all in itself, we saw three
hundred thousand containers that used to go to North America
not going to North America from China. So we saw
a drop of three hundred thousand containers in August alone
(15:14):
when compared to August last year. But we also saw
US imports dropped across the board, mainly from the Far East,
but across the board. So a lot of things have
changed here. Regardless of the fact that we also saw
record hide demand in August. So the things are changing.
It's not only the usual suspects in North America and
Europe anymore. It's becoming say more broad go, it's becoming
(15:37):
Middle East, becoming South America as becoming also Southeast Asia
as an export region more than more than China or
next to China, I would say, because unplugging China. That's
Safar Tam right.
Speaker 1 (15:50):
So you just talk about a lot of different stuff.
I wanted to go back to, you know, when you
were talking about supply growth at three point six percent.
You know, I know it's not your base case, but
you know, the Suez Canal or open up, you know,
how much more would supply increase given the fact that
you know, ships would have to go around you know,
(16:12):
Africa and you know, near term if that were to happen,
it would obviously have some congestion issues at the port,
But like, would that have a significant impact on your
supply growth expectations?
Speaker 2 (16:25):
I will have a massive impact. And that's something of
course we also share in our twenty twenty six Outlook report.
We basically bring forward three scenarios because we like to
to to train and learn our readership of the the
analytical mind thinking about market. Right, So we basically bring
around three scenarios return, full return to red Sea, no
(16:48):
return at all, and what comes in between. Right, So
if we are to see carriers return to red Sea,
we'll probably see a de facto release of capacity that
would be equal to some ten to fifteen percent of
the active fleet because it's no longer needed to go
the longer way around the cave of good hope. Obviously,
these numbers are like a rubber band, so they may
(17:11):
be one point eight million cu, they may be two
point five million tu, but for all practical purposes, it
will undermine that balance that we see in the market now,
favoring lower rates and of course being a huge disadvantage
to the carriers that all of a sudden find no
need for their massive fleets that went well into secure
(17:35):
supply chains and make them more resilient with the rerouting.
But surely that will be a massive jump in supply
growth and the flip side. Of course, also when measuring
demand in shipping, and that goes for container shipping and beyond,
it's not only the boxes you move, but also how
long you move them, right, so demand will definitely also
(17:58):
drop when you all of a sudden cut the sailing
distance in terms of nautical miles from from forest into
the Mediterranean or North Europe by some five thousand utical miles,
so you'll see a massive, say, swing back. Whereas the
Red Sea disruption brought around high demand growth in terms
of longer sailing distances, but also ships bringing in more
(18:23):
goods to inventory even before say, wider geopolitics also in
North America caused them to do so, but also the
supply side that will collapse, So basically they will cross
each other on with that will say, in exactly the
opposite way as they did it back in the early
(18:43):
days of twenty twenty four. So I think we were
in for rough ride everyone, and you allude to yourself
the operation challenges also, Lee, We don't touch on them
here now, but they will definitely also be large scale,
but not last forever once we get that return.
Speaker 1 (19:02):
And you mentioned earlier, you know you expect spot rates
to be weaker the tractual rates. Do you guys have
an estimate in terms of you know, where you see
rates going?
Speaker 2 (19:11):
Yeah, if we are to look into the global spot
rate average as we measured with our own data, our
global spot rate estimate for twenty twenty six is down
by twenty to thirty so quite a sizable chunk. Let
alone that we expect no red sea return, right, so
long term rates probably down by some five to fifteen percent.
(19:34):
Also in that range, of course, it differs from from
one trade into the next. But these are global global
say errows for direction in terms of where rates will
will go down. And you might ask, I do that myself. Now,
why do we not see long term rates coming down
faster or more significant than long term? Because when I
(19:58):
mentioned these numbers, we will see that short term rates
will drop below those of the long term. But but hey,
if we look at the carriers profit law statements, if
we look at their revenue revenue measurements against their cost measurements,
we see a bit of disconnect in in the most
(20:19):
recent year, look at the time charter rates. They have
held steady almost for for a year now at quite
a high level, not dropping as we have seen global
freight rates do. So, so that mismatch, in our book
translates into carriers probably being tough on going too low
(20:41):
or at least not going too low on the long
term contracts they need to to to save guard a
bit of profit from from their long term contracts against
that that high level of cost when when when revenue
seems to be falling.
Speaker 1 (20:55):
How do you define a long term contract?
Speaker 2 (20:57):
Yeah, yeah, in our in our idology, we go for
a long term contract, which is which is at least
eighty eight days for practical purposes, that's at least a
contract that has a validity of three quarters sorry three
months of course, but it can be up to one year.
Sometimes she was in forwards and garious agree on contracts
(21:18):
that are also longer than one year, but anything other
than that is short. We basically define the short market
with a validity up to one month, so a very
few contracts falls within that gap you can see in
the market here. So either you go very short or
you go longer in either of something that is adjusted
(21:40):
on a quarterly basis or having a fixed rate throughout.
But as we spoke about nearly here, really part of
the talking transport session right, indexed in contract seems also
to be a way where the parties of the shipping
industry finds a way to get around the volatility of
the market and talk about service levels instead of hackling
(22:03):
about per fraight rates constantly when they when the markets.
Speaker 1 (22:06):
Change, and you know in your demand forecasts, you know
you mentioned all the different regions, which regions are growing
more than or leading the growth versus which regions are lagging.
Speaker 2 (22:21):
What we have seen in twenty twenty five have been
a staggering high growth of imports into Europe from Far
East in particular, but also from China mostly, but we
have certainly also seen other parts of the world taking
much more conteneral azed goods than ever before. Indian sub
(22:47):
Continent and Middle East. That is, that is not only
a trend that we have seen in twenty twenty five,
but we've seen it early on as well, massive growth
rates on a relatively shorlder, shorter front hall, but definitely
an important hall South, South and Central America certainly also
(23:08):
where you have seen demand growing briskly, when when you
have seen demand not growing into into North America. And
it's I think it's important for me to also at
this point in time put a finger to the fact
that that we're not talking about any any any container
moves that that try to evade the origin of the
(23:31):
goods inside ending up in the US in the final
location no, these are final destination numbers that I'm sharing
with you. So we actually see something that have developed
into much stronger markets over the past couple of years.
But of course the Chinese have canvassed those markets for
for for a decade now, since the first Trump administration
(23:53):
in twenty sixteen. Right, So this is by no mean
a sudden surprise and a sudden move. This is this
is probably harvesting from from from many years of hard
work in order to find out where to send our
manufactured goods when they when they go no longer to
it to North America and US in particular.
Speaker 1 (24:10):
Right, you mentioned earlier some of the pro protectionists things
going on here in the United States. You know, recently
China announced its own port fees on US ships UH
to counter with the U. S t R put in place.
How is all that going to impact, you know, the
global shipping markets from your perspective.
Speaker 2 (24:33):
Such an exchange of fire, I mean, UH is in
the first place, if we drilled back to the early
start of this year, a lot of shippers were actually
paralyzed when when a raft of disruptions hit them anywhere
from from from terraces at that point in time. But
also the early days of of the Ships Act of
America and what we know now as as the U
(24:56):
s TR the US red representative port fees. Right up
until now we have seen some well you can call
it retaliation or basically a response to to to to
to the American UH trade policy set against China. Now
also going in the different direction, we speak on fourteen October,
which is basically the first day in UH in action
(25:19):
for for the U s GR port fits UH, and
we've basically just seen that that that the Chinese have
have set up the same against against that of of
American entities and well American bills. Ships can they can
be counted on on a few hands. But but in
terms of ownerships, UH, that's of course what what will
(25:39):
impact and disrupt mostly others actors than that than container shipping.
But but it's a wide it's a wide range of
of trouble and it also requires of course ships to
to find new markets but also perhaps just to to
redirect some of their manufacturing into different markets than than
they did earlier on. Right, So if you have production
(26:02):
facilities in India, in Vietnam and in China, you probably
bring those in built in China or manufacturers in China
elsewhere than US, and you make sure that the goods
made in Malaysia, Thailand, Vietnam, India for that matter, they
go to the US. So that kind of changing trade
(26:23):
patterns we also see. And basically if I'm just to
reflect a little bit on how carriers have reacted in
most recent years, the main part of the order book
going forward is for ships in the mid large sector
of twelve thousands to some seventeen thousands of use, so
(26:43):
quite big ships, but also versatile and flexible, not only
suited for one trade. So carriers are ready to to
also set up a different trade pattern and a service
network going forward in order to cater for or for these, uh,
these changes in the in the in demandflows.
Speaker 1 (27:03):
And do you think that the capacity owners are going
to be able to pass on the additional costs because
I mean, obviously you know you said the spot rates
are going to be down twenty thirty percent next year.
Is that included kind of shippers trying to recoup some
of these fees because uh, you know, as you know,
when when when a shipping company puts a search hours
(27:24):
on and in these kinds of markets, they don't really,
it's not very sticky.
Speaker 2 (27:27):
You're absolutely right. The the terraces are really tricky to
uh to I mean those those will be here to
uh to to to get into the goods at some
point in time. We know some of the very large
imports and shippers have been able to negotiate a little
bit of lower costs from from their manufacturing units. Right
(27:49):
some companies have also been able to absorb some of
this their own profits, while the lion share have been
in the necessency to it to pass along those those costs.
But in terms support fees getting back to those what
we see there as basically, at least with the implementation
of today, no carriers have asked for specific USTRSER charge
(28:14):
from day one. That may change later down the road,
because those are those legislative fees are also changing over
time from where they are now to where they will
be in twenty twenty eight. And of course center stage
here Cosmon double ocl the Chinese units, but also perhaps
(28:35):
a little bit further down the road, if if that
that fee structure needs some titans, we we may see
that that the the units also owned and charted in
by the by the carriers, by by Chinese financing houses
will get it more directly going forward than that then
(28:55):
we see it currently because those ships may not be
built in China, they may be operated by a Chinese union,
but if they are in the end financed in China,
that's that's a game changeup. But hey, trade will always
find a way financing. I'm pretty sure we'll also find
a way. And but it makes it more compass and
(29:17):
more expensive all the time. Right, So in the end
of the day, it's only you and I as consumers
do it to pay for all these these extra pfticles
being being put up.
Speaker 1 (29:26):
So just switching gears a little bit. I know it's
not your area of expertise per se, but you know
what is Sanata saying about the air freight markets for
twenty twenty six.
Speaker 2 (29:40):
Yeah, we we cover continuer shipping as well as as
air freight for our customer base. So if we look
into to that of air cargo demand and supply growth
for twenty twenty six, we see development that that kind
of mirrors the development that we see at least on
(30:01):
rates for ocean freight. So if we if we go
by the numbers for demand in twenty twenty five, in
air cargo. We estimate for the full year demand growth
to the extent of three to four percent that we
see falling to between two and three percent next year,
So so lower demand growth next year than what we
(30:22):
see this year. If we go for supply, it goes
in the opposite direction. We have supply growth of two
to three percent this year, but three to four percent
expected for next year. So you can clearly see that
that are projected demand and supply growth rate hints towards
a downward pressure on the air cargo rates for twenty
(30:42):
twenty six, but it's also a market that still see
rates flying pretty high, so there's a there's at least
some some room before we get down to anything that
looks like pre COVID levels. I mean that's not also
a little bit of ready of course for for global
(31:04):
air market. But those are the the main the main
numbers and how we see the globally air cargo market
for for twenty twenty six early.
Speaker 1 (31:13):
Is there anything else on your radar when it relates
to global trade and and ocean and air markets.
Speaker 2 (31:18):
Yeah, I think I think the the constant need to
to to to basically pick and choose between the service
providers in the market. And and and ensure that that
you that you get what you actually pay for. I
think is probably the one thing that's that's on most
people's mind because we're not only talking about pricing as
(31:40):
as dynamic as as it may be, and and making
say supply chains resilience all the time, but but it's
also a matter of ensuring that that cargo actually get
gets moving. Uh, and and and the the constant change
in order to to to to to basically to your
(32:01):
market in wherever it may may find and needs to
be supported by the work done in the logistics department
of every single company. Right. So, you do not have
a sizeable company in the world today that doesn't rely
fully on the expertise from either in house procurement of
(32:21):
a freight or at least global logistics. Right. So I
would say back five years, nobody knew who worked in
freight or shipping within your own family, maybe, but where
we are now in late twenty twenty five, those are
the unsung heroes, right, Those are basically those people that
makes the world move while while we just still consume
(32:43):
what we need amidst all the uncertainty in the market.
So hey, a moment two cherish for those hardworking people
wherever they may be found in the truck or at
the docks or sailing.
Speaker 1 (32:58):
This is absolutely And in the beginning of the conversation
when I made the introduction, you know, I said that,
you know, you started, or at least before Bimco, you
were at ds Nord And how did you find your
way into the freight markets?
Speaker 2 (33:14):
Really by coincident actually so but but hey, Hotel California
have been a part of my uh my place to
twelve for a long time. So so once I got
my my my head around shipping, it was something that
I couldn't leave behind. So I'm just pretty fortunate to
be able to work in in all the main shipping sectors.
(33:34):
And uh and hey, I'm a I'm an economist by
by by training, so so really excited about global geography
and politics, and no better place than that than shipping
to to to get your head around those those interests.
So so working with economics just just yeah, go with
(33:56):
the flow and and and see what the what comes next. Fortunately,
shipping is is one where strong relationships are forged on
a daily basis, So just please do it to be
a part of the industry for a couple of decades now, right.
Speaker 1 (34:11):
And where where can people find you know, uh, the
outlook that you guys just published, is it? Is it
available online?
Speaker 2 (34:21):
Yeah? Basically we uh we we we treat our customers
a little bit more nicely when when we issue something
like this right now. So so not only did they
get a digest of it at our summit last week,
but they also get like a jumpstart for for around
ten days reading it and really as a maybe even
acting on it. But I can only encourage you to
(34:42):
go into this and that a dot com website, because
we will throw out a webinar for for you guys
on on twenty three October, and immediately following that where
we talk about the outlook, we will also release it
to everybody else who wants to uh to to read
about and and look into to all the details let alone.
(35:03):
We uh we touch a lot of ground here. But
but there's there's so much more to find into the report.
So so check out sentenceor dot com and uh check
out the webinar and subsequent release of the report.
Speaker 1 (35:16):
Sure, and I have to ask are you into heavy metal?
Because is that is that an Iron Maiden shirt you're wearing.
Speaker 2 (35:24):
It's not Iron Maiden, it's Therapy. It's uh, it's a
death metal band from from Denmark. But but I'm very
much into it to metal music and Iron Maiden. This
is coming to Coople Hill next year, so so I
will buy a ticket for for that for that metal
festival which has been around for a decade in Denmark now.
So but thanks for a noting. It's it's one of
(35:47):
my favorite chops.
Speaker 1 (35:48):
Well, enjoy the concert before we go. I always like
to ask my guest, this is there a book about
the freight markets or management. It's kind of close to
your heart that you would recommend our nursed that they
should take a take a look at.
Speaker 2 (36:04):
Being being an economist working in shipping. I can only
pay a little bit tribute to to to stuff for
maritime economics of course. Uh. The most recent releases is
from two thousand and eight, so so it's a it's
an old book these days, but still the fundamentals of
the industry remain the same. And then ponders like myself
(36:25):
and and like minded people around and yourself have have
built on on that kind of thinking for decades onwards.
So so that's probably the one thing that that you
need to get your head around, uh when when looking
into it to the maritime field, and then just embrace
the fact that you learned something new every single day
when you when you work in shipping. In terms of leadership, well,
(36:49):
I I trust in the talent that that I uh
that went pleased to work with and then seek to
to develop their expertise slowly, but but also thoroughly knowing
that it is immensely tricky to to work in shipping
because everything moves, everything flows so so so you never
(37:11):
really get your head thoroughly around it all. But but
but play you can. You can come in many forms
into shipping. You'll have fun. But but but know your stuff,
know your fundamentals, then you're probably pretty good off and
and and I'll be happy to lead you if if
you go by those those rules.
Speaker 1 (37:31):
All right, Peter, Well, I really want to thank you
for your time and your insights today, and I would
suggest folks to take a look at, you know, the
outlook that you guys published online and when they have
a chance.
Speaker 2 (37:41):
I can only welcome everyone with with a keen interest
into that to to to read it and to pop
any any questions you you may have either two to
me or anyone else at Sanela, because we're just happy
to to debate also well our fundamentals and and I'll
look just as we've done here. And so thank you
so much for for having me on to Talking to
(38:03):
Transport podcast.
Speaker 1 (38:05):
All right, and I want to thank you for tuning in.
If you liked the episode, please subscribe and leave a review.
We've lined up a number of great guests for the podcast,
so please check back to hear conversations with C suite executives, shippers, regulators,
and decision makers within the freight markets. Also, if you
want to learn more about the freight transportation markets, check
(38:26):
out our work on the Bloomberg Terminal at Bigo and
on social media. This is Lee Clasgal signing off. Thanks
for talking transports with me. Talk to you next week.
Hi everyone, this is Lee Clasgow and we're Talking Transports.
Welcome to Bloomberg Intelligence Talking Transports podcast. I'm your host,
Lee Klascow, Senior Freight Transportation Logistics Salles at Bloomberg Intelligence,
Bloomberg's in house research arm of almost five hundred analysts
and strategists around the globe. Quick public service announcement before
we dive in. Your support is instrumental to keep bringing
(00:29):
great guests and conversations to you, our listeners, and we
need your support. So please, if you enjoy this podcast,
share it, like it and leave a comment. Also, if
you've got ideas, feedback, or just want to talk transports,
I'm always happy to connect. You can find me on
the Bloomberg terminal, LinkedIn or on x at Logistics. Lee,
(00:51):
I'm very excited to have with us today. Peter Sand
Chief analyst at Sanata, a position he's held since joining
the firm in twenty twenty one. To Sanetta, Peter spent
over a decade at Bimco, where he's responsible for analyzing
commercial markets based on the global economic situations and its
influence on tree. He also previously worked at ds Nordon,
(01:12):
a Danish shipping company. Operating in the dry cargo and
tanker segments worldwide as a senior analyst. Welcome to Talking transports, Peter.
It's good to see you again.
Speaker 2 (01:22):
It's amazing to be and could come your good company
lie and always have it to talk transports.
Speaker 1 (01:27):
All right, So Sanatta, you know it's not spelled how
it sounds. It starts with an X. Why don't you
tell people a little bit about the firm?
Speaker 2 (01:36):
Yeah, I mean, now, we're basically also here to disrupt,
not in the way that the supply chains are disrupted
on a daily basis, but we are pretty new kids
on the block of being around for some twelve thirteen years,
and basically our mission is to transform the way that
freight in the form of container shipping and f freight
is bored and sold. So we seek to be the independent,
(01:59):
neutral voice in the industry that allows all our industry
partners and customers basically to dive into the ocean and
air of market intelligence and benchmark how they are performing
when they're when they buy and sell freight. So so
in an autill that's that's what we're all about. And
we're constantly, of course trying to improve on what we
(02:21):
did yesterday recently acquiring also Easy also a household name
for those working within container shipping. I'm sure, of course
on our trail to to bring even an even better
platform around.
Speaker 1 (02:36):
So are you guys a freight forwarder.
Speaker 2 (02:38):
Not at all. We are basically here for mainly the
largest shippers of the world, those with the most complex
supply chains, those in need not only to select the
right carrier or select the right freight forwarder, but also
to benchmark the carriers against one another and against a
raft of of key indicators. Just about to launch a
(03:03):
carrier score card for basically doing that. But no, we're
not handling freight like that, but we are empowering our
customers to do their job even better, to improve their
decision making. Of course, critically, as we move into the
fourth quarter of twenty twenty five, now a lot of
shippers with a stake in EUROPEA now getting their feet
(03:27):
into the contract negotiations with the largest carriers and forwarders
of the world. So you better prepare yourself for negotiations
like that. And that's where we bring in say the
neutral and the neutral basically market the intelligence so they
can talk about the services rather than rip each other
off with misquotations.
Speaker 1 (03:49):
And so your customers are the capacity owners, the shippers
and the forwarders exactly.
Speaker 2 (03:56):
We basically seek to deal with or you may say,
three parties of the logistics, the ship as b c os,
the forwarders and and the carriers bread and Butter being
being the b c os from from a starting point,
but but recently of course also we we have a
(04:16):
high profile within index link contracts. Of course we we
do our own index and and in order to have
an index you need to be trusted by either party
because then of course without that trust you you can't
really agree on on what's the right index to do
your contract right. So so that's h that's basically the
(04:38):
element of trust that we could put in between all
parties of of.
Speaker 1 (04:42):
The industry and uh Zentrara is it's it's a privately
held company, are you private equity, venture capital, it's founders,
who's who owns the company?
Speaker 2 (04:54):
Yeah, it's a little bit of all the things that
you mentioned there. So so we still have Patrick Workland,
co founder and CEO of Seneta as as leading the pack.
We have we have a solid solid board and full
with with with with experts into not only sas, but
(05:15):
certainly also logistics and and and and moving off cargo
in every single aspect. So so we try to move
forward and our ambition, of course is to get that
that unicorn evaluation at that some point in time. So
so that's what we work hard on to do every
single day. And I'll say it's a it's really a
(05:36):
tough job, but we're also on the right track, so
so well we'll keep crying on all right.
Speaker 1 (05:42):
And you know, Peter, one of the main reasons why
we want to have you on is Zenna and I
guess yourself and your team you recently put out your
twenty twenty six outlook for the liner market. Kind of
can you talk about the major takeaways from your your
report and your expectations as we, you know, head into
next year.
Speaker 2 (06:01):
I think it's always relevant to to to share our
thoughts on that as a part of the Senate's thought
leadership in global logistics. So obviously we set the scene
as early as we can, which is often around our
large customer summit that that is held in Well, this
year we went to to Barcelona and that's basically where
(06:22):
we where we sneak peak for the customers. What do
we expect to be the factors that will impact the
container shipping market and f right for that matter, But
for my area of expertise it's ocean only. We go
into those elements that will make break or shake the
(06:43):
market the next year. Of course, the Red Sea disruption
is the one elephant in the room uh and for
all practical purposes, but also because we still believe so
regardless of the the Gaza ceasefire Gaza Agreement that that
is now coming into into play, our expectations are still
(07:05):
for no large scale return of carriers to the Red Sea.
So as also being outspoken about what are assumptions, because
in the end of the day, that's of course the
underlying metrics that means the most to to to a
forecast that seems to be one again once again heavy
on the on the fleet size, where carriers are taking
(07:30):
delivery of more capacity than our forecast of demand actually
requires them to do so. So in that account, we
are moving into an area where supply will exceed that
of demand and our expectations are thus rates to to
come down from from where they have been most most
recently spot rates down more than than those of long
(07:53):
term container rates partly due to a mismatched mismatch in
in in revenue and cost of the carriers. And we
can more about that in a minute, but at least
that's that's our world forecast to fundamental weakening that will
bring rates down from from where they have recently been. So,
but of course, always with a caveat black sworms can
(08:14):
still come about in various forms and geopolitics. I think
it's probably the one fact so that we that we
expect the most significant disruption to to to come from.
Speaker 1 (08:25):
And so you know, your your assumption is, you know,
as you mentioned, based that the Sewez Canal is not
going to open up, or at least carriers or or
ship owners will still avoid it. What has to happen
for you know, that to change in your mind? Obviously
we don't know if the rec piece deal UH in
(08:46):
the Middle East is going to hold, hopefully it does,
so you know what has to happen for acid owners
to be more comfortable with going through the Suez.
Speaker 2 (08:57):
Yeah. I like the fact that you also point to
a sid owners because in the end it very much
rests on insurance companies being able to cover of course,
the assets Holland machinery, but certainly also cargo and crew
of course, so until that happens for for all, we
(09:17):
see no large scale return. But having said that, I
mean we know that that contin ships also do transit
the Babel Mandeb straight in the southernmost part of Red Sea,
but also seuis Cannal to the extent of some fifteen
to twenty percent if you go by numbers as compared
to pre Red Sea disruptions. So there is still business
(09:38):
carried out there, but those are smaller niche players, not
the top ten carriers for the lions of their networks.
Even though we also know that CMACGM, the French carrier
under the protection of French Navy, ships do transit occasionally,
but it's not something that you can that you can
(10:00):
say expect going forward. So so what what is really
needed is a small peace in the Middle East, the
wider Middle East region. It's it's been going in the
wrong direction for more than two years now, uh, And
I think it's fair to say that the international shipping
is an unfortunate collateral damage being held hostage by the
(10:20):
hoothy rebels in particular, but it's all a part of
the bigger, more complex and network in the local power
interest of Iran, Saudi Arabia, Israel. And then we just
got the hoothy rebels also. So that's why we, whenever
we had have the chance, put the attention to the
fact that that don't put your hopes up high. Even
(10:42):
though it's much welcome to to see now this is
fire in Gaza, there's still many more steps and roads
to to walk before we get to a point where
we can say, okay, Houthi rebels will present no material
risk to international ship and particular containerships and also gas
(11:03):
carriers that have shied away. Car carriers also to almost
one hundred percent extent will return.
Speaker 1 (11:09):
And so you know, you mentioned a part of your
analysis you believe supply growth is going to outpaced demand.
That's driven by that, you know, the order book and
obviously I'm assuming tepid demand. Do you have a spread
in terms of what that you know, how many percentage
points or basis points are you guys expecting supply to
outpaced demand?
Speaker 2 (11:28):
Yeah, for sure, our expectations for demand growth in twenty
twenty six is right around three percent. We expect the
fleet to grow by three point six percent so now,
so it's not by massive difference that we that we
measure over capacity to grow in twenty twenty six. And
that may actually be the positive spin to what comes
(11:52):
about in twenty twenty six, because if we look further ahead,
you and I only that we got the world's largest
container shipping order book right here, right now, we have
more than a thousand container ships, more than ten million
t use on order, and that will be delivered in
twenty twenty seven and mostly in twenty twenty eight. So
say the supply side is basically stacked against carriers in
(12:15):
the foreseeable future. And if we are to, let me
give you an example of how significant that is, because
we got a fleet right round seven thousand ships, thirty
two thirty three million TU. But in order to offset
the entire ty of the order book, you need to
demolish or scrap every single container ship built prior to
twenty ten. It will never ever happen. But just to
(12:39):
put in the year scale of this, we have twenty
twenty six now where the difference between demand and supply
is the smallest it has been for a long time.
We had the COVID years, crazy strong on demand due
to basically the American consumers going absolutely about us and
(13:01):
a lot of congestion in the wake of that, and
all of a sudden we saw, hey, let's uh, let's
let's get back to what once was normal. And then
around comes ret see right, So so there's always something
to to to manage, always triggy triggy supply chains. And
that's basically also why a disrupted like the Red Sea.
I think it's it's it's worthwhile to pay attention to
(13:22):
the fact that that shipping is so much more than ocean.
It's also rail, it's also truck, it's also air and
various combination of that. Right so, so early in the
Red Sea crisis we saw the invention of of c
and air combinations to to get goods into to Europe
faster than than than would otherwise be the case. Why
(13:45):
I do buy for instance. So so all that kind
of i'll say, reinventing the wheel so to speak, has
been coming into force. But for twenty twenty six, probably
one thing that we hear from most chippers is that
they are looking more to ocean freight than that of
air freight. Uh. And it comes from from from various places,
(14:07):
but of course, not least because air raid is so
much more expensive, and cost cutting is an initiative. It's
an initiative that you hear from from left, right and center.
So and speaking of demand, speaking of as a economic changes,
often you see container shipping being very much about Europe
and North America, but North America for sure. I have
(14:30):
been in reverse with the Trump administration setting up barriers
to trade, in particular against China, so so so that
in itself have brought around some some staggering numbers to
the table, and then just to bring forward what we
see now into twenty twenty six, this have resulted in
(14:53):
a lot of changes to the trade batons. So if
I'm just to throw a few numbers that you here,
if we look at all in itself, we saw three
hundred thousand containers that used to go to North America
not going to North America from China. So we saw
a drop of three hundred thousand containers in August alone
(15:14):
when compared to August last year. But we also saw
US imports dropped across the board, mainly from the Far East,
but across the board. So a lot of things have
changed here. Regardless of the fact that we also saw
record hide demand in August. So the things are changing.
It's not only the usual suspects in North America and
Europe anymore. It's becoming say more broad go, it's becoming
(15:37):
Middle East, becoming South America as becoming also Southeast Asia
as an export region more than more than China or
next to China, I would say, because unplugging China. That's
Safar Tam right.
Speaker 1 (15:50):
So you just talk about a lot of different stuff.
I wanted to go back to, you know, when you
were talking about supply growth at three point six percent.
You know, I know it's not your base case, but
you know, the Suez Canal or open up, you know,
how much more would supply increase given the fact that
you know, ships would have to go around you know,
(16:12):
Africa and you know, near term if that were to happen,
it would obviously have some congestion issues at the port,
But like, would that have a significant impact on your
supply growth expectations?
Speaker 2 (16:25):
I will have a massive impact. And that's something of
course we also share in our twenty twenty six Outlook report.
We basically bring forward three scenarios because we like to
to to train and learn our readership of the the
analytical mind thinking about market. Right, So we basically bring
around three scenarios return, full return to red Sea, no
(16:48):
return at all, and what comes in between. Right, So
if we are to see carriers return to red Sea,
we'll probably see a de facto release of capacity that
would be equal to some ten to fifteen percent of
the active fleet because it's no longer needed to go
the longer way around the cave of good hope. Obviously,
these numbers are like a rubber band, so they may
(17:11):
be one point eight million cu, they may be two
point five million tu, but for all practical purposes, it
will undermine that balance that we see in the market now,
favoring lower rates and of course being a huge disadvantage
to the carriers that all of a sudden find no
need for their massive fleets that went well into secure
(17:35):
supply chains and make them more resilient with the rerouting.
But surely that will be a massive jump in supply
growth and the flip side. Of course, also when measuring
demand in shipping, and that goes for container shipping and beyond,
it's not only the boxes you move, but also how
long you move them, right, so demand will definitely also
(17:58):
drop when you all of a sudden cut the sailing
distance in terms of nautical miles from from forest into
the Mediterranean or North Europe by some five thousand utical miles,
so you'll see a massive, say, swing back. Whereas the
Red Sea disruption brought around high demand growth in terms
of longer sailing distances, but also ships bringing in more
(18:23):
goods to inventory even before say, wider geopolitics also in
North America caused them to do so, but also the
supply side that will collapse, So basically they will cross
each other on with that will say, in exactly the
opposite way as they did it back in the early
(18:43):
days of twenty twenty four. So I think we were
in for rough ride everyone, and you allude to yourself
the operation challenges also, Lee, We don't touch on them
here now, but they will definitely also be large scale,
but not last forever once we get that return.
Speaker 1 (19:02):
And you mentioned earlier, you know you expect spot rates
to be weaker the tractual rates. Do you guys have
an estimate in terms of you know, where you see
rates going?
Speaker 2 (19:11):
Yeah, if we are to look into the global spot
rate average as we measured with our own data, our
global spot rate estimate for twenty twenty six is down
by twenty to thirty so quite a sizable chunk. Let
alone that we expect no red sea return, right, so
long term rates probably down by some five to fifteen percent.
(19:34):
Also in that range, of course, it differs from from
one trade into the next. But these are global global
say errows for direction in terms of where rates will
will go down. And you might ask, I do that myself. Now,
why do we not see long term rates coming down
faster or more significant than long term? Because when I
(19:58):
mentioned these numbers, we will see that short term rates
will drop below those of the long term. But but hey,
if we look at the carriers profit law statements, if
we look at their revenue revenue measurements against their cost measurements,
we see a bit of disconnect in in the most
(20:19):
recent year, look at the time charter rates. They have
held steady almost for for a year now at quite
a high level, not dropping as we have seen global
freight rates do. So, so that mismatch, in our book
translates into carriers probably being tough on going too low
(20:41):
or at least not going too low on the long
term contracts they need to to to save guard a
bit of profit from from their long term contracts against
that that high level of cost when when when revenue
seems to be falling.
Speaker 1 (20:55):
How do you define a long term contract?
Speaker 2 (20:57):
Yeah, yeah, in our in our idology, we go for
a long term contract, which is which is at least
eighty eight days for practical purposes, that's at least a
contract that has a validity of three quarters sorry three
months of course, but it can be up to one year.
Sometimes she was in forwards and garious agree on contracts
(21:18):
that are also longer than one year, but anything other
than that is short. We basically define the short market
with a validity up to one month, so a very
few contracts falls within that gap you can see in
the market here. So either you go very short or
you go longer in either of something that is adjusted
(21:40):
on a quarterly basis or having a fixed rate throughout.
But as we spoke about nearly here, really part of
the talking transport session right, indexed in contract seems also
to be a way where the parties of the shipping
industry finds a way to get around the volatility of
the market and talk about service levels instead of hackling
(22:03):
about per fraight rates constantly when they when the markets.
Speaker 1 (22:06):
Change, and you know in your demand forecasts, you know
you mentioned all the different regions, which regions are growing
more than or leading the growth versus which regions are lagging.
Speaker 2 (22:21):
What we have seen in twenty twenty five have been
a staggering high growth of imports into Europe from Far
East in particular, but also from China mostly, but we
have certainly also seen other parts of the world taking
much more conteneral azed goods than ever before. Indian sub
(22:47):
Continent and Middle East. That is, that is not only
a trend that we have seen in twenty twenty five,
but we've seen it early on as well, massive growth
rates on a relatively shorlder, shorter front hall, but definitely
an important hall South, South and Central America certainly also
(23:08):
where you have seen demand growing briskly, when when you
have seen demand not growing into into North America. And
it's I think it's important for me to also at
this point in time put a finger to the fact
that that we're not talking about any any any container
moves that that try to evade the origin of the
(23:31):
goods inside ending up in the US in the final
location no, these are final destination numbers that I'm sharing
with you. So we actually see something that have developed
into much stronger markets over the past couple of years.
But of course the Chinese have canvassed those markets for
for for a decade now, since the first Trump administration
(23:53):
in twenty sixteen. Right, So this is by no mean
a sudden surprise and a sudden move. This is this
is probably harvesting from from from many years of hard
work in order to find out where to send our
manufactured goods when they when they go no longer to
it to North America and US in particular.
Speaker 1 (24:10):
Right, you mentioned earlier some of the pro protectionists things
going on here in the United States. You know, recently
China announced its own port fees on US ships UH
to counter with the U. S t R put in place.
How is all that going to impact, you know, the
global shipping markets from your perspective.
Speaker 2 (24:33):
Such an exchange of fire, I mean, UH is in
the first place, if we drilled back to the early
start of this year, a lot of shippers were actually
paralyzed when when a raft of disruptions hit them anywhere
from from from terraces at that point in time. But
also the early days of of the Ships Act of
America and what we know now as as the U
(24:56):
s TR the US red representative port fees. Right up
until now we have seen some well you can call
it retaliation or basically a response to to to to
to the American UH trade policy set against China. Now
also going in the different direction, we speak on fourteen October,
which is basically the first day in UH in action
(25:19):
for for the U s GR port fits UH, and
we've basically just seen that that that the Chinese have
have set up the same against against that of of
American entities and well American bills. Ships can they can
be counted on on a few hands. But but in
terms of ownerships, UH, that's of course what what will
(25:39):
impact and disrupt mostly others actors than that than container shipping.
But but it's a wide it's a wide range of
of trouble and it also requires of course ships to
to find new markets but also perhaps just to to
redirect some of their manufacturing into different markets than than
they did earlier on. Right, So if you have production
(26:02):
facilities in India, in Vietnam and in China, you probably
bring those in built in China or manufacturers in China
elsewhere than US, and you make sure that the goods
made in Malaysia, Thailand, Vietnam, India for that matter, they
go to the US. So that kind of changing trade
(26:23):
patterns we also see. And basically if I'm just to
reflect a little bit on how carriers have reacted in
most recent years, the main part of the order book
going forward is for ships in the mid large sector
of twelve thousands to some seventeen thousands of use, so
(26:43):
quite big ships, but also versatile and flexible, not only
suited for one trade. So carriers are ready to to
also set up a different trade pattern and a service
network going forward in order to cater for or for these, uh,
these changes in the in the in demandflows.
Speaker 1 (27:03):
And do you think that the capacity owners are going
to be able to pass on the additional costs because
I mean, obviously you know you said the spot rates
are going to be down twenty thirty percent next year.
Is that included kind of shippers trying to recoup some
of these fees because uh, you know, as you know,
when when when a shipping company puts a search hours
(27:24):
on and in these kinds of markets, they don't really,
it's not very sticky.
Speaker 2 (27:27):
You're absolutely right. The the terraces are really tricky to
uh to I mean those those will be here to
uh to to to get into the goods at some
point in time. We know some of the very large
imports and shippers have been able to negotiate a little
bit of lower costs from from their manufacturing units. Right
(27:49):
some companies have also been able to absorb some of
this their own profits, while the lion share have been
in the necessency to it to pass along those those costs.
But in terms support fees getting back to those what
we see there as basically, at least with the implementation
of today, no carriers have asked for specific USTRSER charge
(28:14):
from day one. That may change later down the road,
because those are those legislative fees are also changing over
time from where they are now to where they will
be in twenty twenty eight. And of course center stage
here Cosmon double ocl the Chinese units, but also perhaps
(28:35):
a little bit further down the road, if if that
that fee structure needs some titans, we we may see
that that the the units also owned and charted in
by the by the carriers, by by Chinese financing houses
will get it more directly going forward than that then
(28:55):
we see it currently because those ships may not be
built in China, they may be operated by a Chinese union,
but if they are in the end financed in China,
that's that's a game changeup. But hey, trade will always
find a way financing. I'm pretty sure we'll also find
a way. And but it makes it more compass and
(29:17):
more expensive all the time. Right, So in the end
of the day, it's only you and I as consumers
do it to pay for all these these extra pfticles
being being put up.
Speaker 1 (29:26):
So just switching gears a little bit. I know it's
not your area of expertise per se, but you know
what is Sanata saying about the air freight markets for
twenty twenty six.
Speaker 2 (29:40):
Yeah, we we cover continuer shipping as well as as
air freight for our customer base. So if we look
into to that of air cargo demand and supply growth
for twenty twenty six, we see development that that kind
of mirrors the development that we see at least on
(30:01):
rates for ocean freight. So if we if we go
by the numbers for demand in twenty twenty five, in
air cargo. We estimate for the full year demand growth
to the extent of three to four percent that we
see falling to between two and three percent next year,
So so lower demand growth next year than what we
(30:22):
see this year. If we go for supply, it goes
in the opposite direction. We have supply growth of two
to three percent this year, but three to four percent
expected for next year. So you can clearly see that
that are projected demand and supply growth rate hints towards
a downward pressure on the air cargo rates for twenty
(30:42):
twenty six, but it's also a market that still see
rates flying pretty high, so there's a there's at least
some some room before we get down to anything that
looks like pre COVID levels. I mean that's not also
a little bit of ready of course for for global
(31:04):
air market. But those are the the main the main
numbers and how we see the globally air cargo market
for for twenty twenty six early.
Speaker 1 (31:13):
Is there anything else on your radar when it relates
to global trade and and ocean and air markets.
Speaker 2 (31:18):
Yeah, I think I think the the constant need to
to to to basically pick and choose between the service
providers in the market. And and and ensure that that
you that you get what you actually pay for. I
think is probably the one thing that's that's on most
people's mind because we're not only talking about pricing as
(31:40):
as dynamic as as it may be, and and making
say supply chains resilience all the time, but but it's
also a matter of ensuring that that cargo actually get
gets moving. Uh, and and and the the constant change
in order to to to to to basically to your
(32:01):
market in wherever it may may find and needs to
be supported by the work done in the logistics department
of every single company. Right. So, you do not have
a sizeable company in the world today that doesn't rely
fully on the expertise from either in house procurement of
(32:21):
a freight or at least global logistics. Right. So I
would say back five years, nobody knew who worked in
freight or shipping within your own family, maybe, but where
we are now in late twenty twenty five, those are
the unsung heroes, right, Those are basically those people that
makes the world move while while we just still consume
(32:43):
what we need amidst all the uncertainty in the market.
So hey, a moment two cherish for those hardworking people
wherever they may be found in the truck or at
the docks or sailing.
Speaker 1 (32:58):
This is absolutely And in the beginning of the conversation
when I made the introduction, you know, I said that,
you know, you started, or at least before Bimco, you
were at ds Nord And how did you find your
way into the freight markets?
Speaker 2 (33:14):
Really by coincident actually so but but hey, Hotel California
have been a part of my uh my place to
twelve for a long time. So so once I got
my my my head around shipping, it was something that
I couldn't leave behind. So I'm just pretty fortunate to
be able to work in in all the main shipping sectors.
(33:34):
And uh and hey, I'm a I'm an economist by
by by training, so so really excited about global geography
and politics, and no better place than that than shipping
to to to get your head around those those interests.
So so working with economics just just yeah, go with
(33:56):
the flow and and and see what the what comes next. Fortunately,
shipping is is one where strong relationships are forged on
a daily basis, So just please do it to be
a part of the industry for a couple of decades now, right.
Speaker 1 (34:11):
And where where can people find you know, uh, the
outlook that you guys just published, is it? Is it
available online?
Speaker 2 (34:21):
Yeah? Basically we uh we we we treat our customers
a little bit more nicely when when we issue something
like this right now. So so not only did they
get a digest of it at our summit last week,
but they also get like a jumpstart for for around
ten days reading it and really as a maybe even
acting on it. But I can only encourage you to
(34:42):
go into this and that a dot com website, because
we will throw out a webinar for for you guys
on on twenty three October, and immediately following that where
we talk about the outlook, we will also release it
to everybody else who wants to uh to to read
about and and look into to all the details let alone.
(35:03):
We uh we touch a lot of ground here. But
but there's there's so much more to find into the report.
So so check out sentenceor dot com and uh check
out the webinar and subsequent release of the report.
Speaker 1 (35:16):
Sure, and I have to ask are you into heavy metal?
Because is that is that an Iron Maiden shirt you're wearing.
Speaker 2 (35:24):
It's not Iron Maiden, it's Therapy. It's uh, it's a
death metal band from from Denmark. But but I'm very
much into it to metal music and Iron Maiden. This
is coming to Coople Hill next year, so so I
will buy a ticket for for that for that metal
festival which has been around for a decade in Denmark now.
So but thanks for a noting. It's it's one of
(35:47):
my favorite chops.
Speaker 1 (35:48):
Well, enjoy the concert before we go. I always like
to ask my guest, this is there a book about
the freight markets or management. It's kind of close to
your heart that you would recommend our nursed that they
should take a take a look at.
Speaker 2 (36:04):
Being being an economist working in shipping. I can only
pay a little bit tribute to to to stuff for
maritime economics of course. Uh. The most recent releases is
from two thousand and eight, so so it's a it's
an old book these days, but still the fundamentals of
the industry remain the same. And then ponders like myself
(36:25):
and and like minded people around and yourself have have
built on on that kind of thinking for decades onwards.
So so that's probably the one thing that that you
need to get your head around, uh when when looking
into it to the maritime field, and then just embrace
the fact that you learned something new every single day
when you when you work in shipping. In terms of leadership, well,
(36:49):
I I trust in the talent that that I uh
that went pleased to work with and then seek to
to develop their expertise slowly, but but also thoroughly knowing
that it is immensely tricky to to work in shipping
because everything moves, everything flows so so so you never
(37:11):
really get your head thoroughly around it all. But but
but play you can. You can come in many forms
into shipping. You'll have fun. But but but know your stuff,
know your fundamentals, then you're probably pretty good off and
and and I'll be happy to lead you if if
you go by those those rules.
Speaker 1 (37:31):
All right, Peter, Well, I really want to thank you
for your time and your insights today, and I would
suggest folks to take a look at, you know, the
outlook that you guys published online and when they have
a chance.
Speaker 2 (37:41):
I can only welcome everyone with with a keen interest
into that to to to read it and to pop
any any questions you you may have either two to
me or anyone else at Sanela, because we're just happy
to to debate also well our fundamentals and and I'll
look just as we've done here. And so thank you
so much for for having me on to Talking to
(38:03):
Transport podcast.
Speaker 1 (38:05):
All right, and I want to thank you for tuning in.
If you liked the episode, please subscribe and leave a review.
We've lined up a number of great guests for the podcast,
so please check back to hear conversations with C suite executives, shippers, regulators,
and decision makers within the freight markets. Also, if you
want to learn more about the freight transportation markets, check
(38:26):
out our work on the Bloomberg Terminal at Bigo and
on social media. This is Lee Clasgal signing off. Thanks
for talking transports with me. Talk to you next week.
Host
Lee Klaskow
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