It’s January and just as the sun rises every day, the time between Christmas and Chinese New Year is the traditional period where dry bulk takes a breather. Yes, the Chinese economy might not grow as strongly in 2022 as many in dry bulk had hoped, but there is still little reason to expect that the current upcycle is ending any time soon, multiple analysts believe.

“Although the high level of volatility in 2021 might be slowing down, the dry bulk sector remains in an upcycle driven by relatively low growth in supply, strong demand for bulk commodities, and continuing infrastructure bottlenecks and supply chain constraints that affect the whole shipping universe,” Breakwave Advisors suggested last week.

Looking further ahead, Lorentzen & Stemoco predicts demand for the dry bulk shipping market will outstrip modest supply growth this year and continue to do so until 2024. Lorentzen & Stemoco predicts vessel capacity utilization will firm up to 87.6% this year and tighten further to 88.6% next year before possibly hitting 90.7% in 2024. The 90% vessel capacity utilization is the magic threshold as outlined by Dr Martin Stopford in his Maritime Economics book where freight rates leap as bargaining power shifts from charterers to shipowners.

The opening days of the new year in the world of container shipping have been a continuation of the main themes that contributed to a record-breaking 2021. Covid-19-related delays, rates climbing to new highs and the public increasingly conversant in all things shipping. Can container shipping better its financial performance of last year where liners were tipped by consultants Drewry to have made a combined EBIT more than $190bn?

Annual contract freight rates this year will be going up by more than 60% on the major routes, when compared with 2021 contract rates, Drewry estimates. Considering both spot rates and contract freight rates, average container shipping rates will see a further annual increase in 2022: the latest Drewry Container Forecaster expects an increase of 16% in 2022, following the doubling of rates in 2021. Drewry came out this week, stating it does indeed see liner shipping boosting its coffers further this year, predicting a collective EBIT of $200bn.

Analysts at HSBC, meanwhile, reckon liner shipping will make a $163bn operating profit this year, up 8% year-on-year. If ships remain tied up, then there’s little chance of a rate collapse anytime soon.

Logistics giant Kuehne+Nagel’s digital platform seaexplorer has developed a unique Global Disruption Indicator, which tallies the cumulative teu waiting time in days based on container vessel capacity in disrupted hot spots. The indicator shows that today’s ship logjams are roughly 11 times what they ought to be for the long vessel queues to start to ease. Data from San Francisco-based freight forwarding and customs brokerage Flexport shows containers are taking twice as long to reach their destination compared to the pre-pandemic period. Sea-Intelligence data shows that pre-pandemic typically 2% of containership capacity was caught up in delays, a figure that shot up to 11% in 2021.