Rolf Hubben Jansen, CEO of Herbert, the fourth largest shipping company in Europe, said on Thursday that the one-year downturn in the container shipping industry shows preliminary signs of improvement, although it is currently unclear whether this rebound is sustainable.

Jansen said, "The market is still not strong, but I think we see some signs of stabilization." "As we expected, we only saw a slight increase, and now we need to see how long this increase can last

Previously, the Hamburg based company announced low demand in the first half of the year and confirmed its full year forecast released in March. The stock fell about 5% in afternoon trading.

Shipping companies, which account for four fifths of global commodity trade, made huge profits in 2021 and early 2022 due to a surge in consumer demand for goods, leading to port congestion and squeezing ship capacity. Since then, the spot container freight rates of Herbert, Maersk, and other shipping companies have dropped eight times from their peak in 2021.

As companies reduce inventory, demand was weak earlier this year, but "we also see some signs of recovery," Jansen said. At present, what we are seeing is a quite normal peak season, and the fundamentals of the global economy are still not that bad - not only in the United States, but also in some emerging markets

He added, "When I look towards the medium term, I am not so pessimistic

However, Herbert's competitors are not as optimistic.

Maersk, headquartered in Copenhagen, lowered its expectations for global container trade last week, and its CEO Vincent Clerc said, "This sluggish environment will continue for the rest of this year

A week ago, France's Daffy Shipping stated that "the transportation and logistics market is still sluggish", and slow economic growth and sustained inflation are expected to drag down consumer spending for the rest of this year.

Jansen stated that as the industry peak season approaches, he sees "some degree of recovery in demand". The peak season usually lasts from August to October, as retailers and other importers order more goods for back to school and year-end holiday shopping.

If we look back on the past 10 or 12 weeks, we will definitely see an improvement in the loading situation compared to last year, and spot freight rates on some major routes have rebounded, "he refers to short-term container prices. It remains to be seen whether this will be a very strong peak season

The Drury World Container Index rose 1.7% to $1791 per 40 foot container, marking its fifth consecutive week of gains. This is the longest consecutive increase since January 2022. The composite index reflects the short-term rates of 8 trade routes connecting Asia, Europe, and the United States.

Container freight rates have risen for the fifth consecutive week

Shipping analysis company Xeneta AS stated on Thursday that spot freight rates on its platform have rebounded above long-term contract freight rates, a reversal that puts importers and other shippers transitioning between the two markets in a more difficult position.

Peter Sand, Chief Analyst of Xeneta, said, "Many shipping companies that take advantage of short-term market weakness and delay signing new long-term contracts will be nervously monitoring the situation." "Are they negotiating too late? Have the market already bottomed out before the rebound? Or is this just a false dawn for shipping companies

Jansen stated that he hopes inflation will continue to decline in the next three to six months. But he reiterated that in the long run, container freight rates will have to be adjusted higher because carriers face greater costs compared to before the pandemic - from charter rates to different types of fuel.

He said, "The current costs are structurally higher than the levels from 2018 to 2019, so using these rates as benchmarks is not the correct reference point." Therefore, over time, rates must stabilize at higher levels than before