The latest edition of the multipurpose Market Sentiment Index, issued by One World Shipbrokers, is experiencing its January renaissance, rising above the October 2023 mark. The MSI for the MPP sector has gone up a level of 52.4, versus the level of 51.5 in October 2023. 

The increase in optimism is a recurring feature of the January poll, according to One World Shipbrokers. In all of the four January polls that the MSI has been gathering data, an improvement in new year sentiment over the previous Q4 levels has been observed.

Previous New Year MPP sentiment has been supported by the expectation of an improving energy market – particularly renewables – which in reflection stuttered more than it purred in 2023. This year, carriers are indicating that their optimism for an improvement in cargo volumes is more muted.

But the impact of conflict in the Red Sea area, and the ongoing water shortage at the Panama Canal is that more ton-miles are being sailed around the two Cape shortening supply and increasing freight. Since neither situation is looking like being resolved in the near term, carriers and shippers are facing the conse­quen­ces of additional costs.

In a straw poll among carriers, about half of those asked said they were avoiding the Red Sea if possible whereas the other half felt that they were not a carrier with characteristics of political interest against which aggression might be launched, and will continue to maintain schedules by transiting the Suez Canal.

That said, with war risk premi­ums sharply rising and in some cases, armed escorts accompanying the vessel, the cost of maintaining a service via the Red Sea is not without a financial impact to shippers that will continue as long as the region remains volatile.