There’s a continued downward trend in container prices and leasing rates reflecting supply chain disruption
This is to be expected following the skyrocketing container prices over the last two quarters and the plateau in September, says Container xChange’s December container logistics report initiative.
Looking at major ports in China, US, Germany and UK, the report reveals container prices declining from August to November. Prices in the US dropped by around 18% in the past four months, it’s a similar story across Europe and China.
“In the past year, Covid has caused unpredictable dirsruptions at ports and labour capacitu throughout the supply chain,” said Christian Roeloffs, co-founder and CEO, Container xChange.
“Going into the new year, we look into continued unpredictability. If we look at the current demand, we see that the demand for containers hasn’t increased significantly. The current spike in rates is caused by temporary supply crunch.”
Container insight
The report reveals that all the ports in Europe have higher Container Availability Index (CAx) values than 2020 and 2019. Moreover, the concentration of CAx values are in the CAx range of 0.63 – 0.89.
This indicates more inbound containers consistently than outbounds and when compared to the previous two years, at almost more than double the levels at the 17 busiest ports.
The problem of consistent inbound container logjam shows high burden on ports globally and reflects the disrupted supply chain.
Sound advice
2021 was an outstanding year for the shipping industry with huge profits for the ocean freight industry surpassing profits made over the whole decade, pointed out fellow co-founder of Container xChange and CEO, Johannes Schlingmeier.
This was the year when many realised that shipping and the supply chain not only exists, but thrives. It also saw logistics firms on a rapid progression towards digitalisation. So there were positives.
Recovery from the Covid disruption was originally projected to take until 2026, but may now take place as early as 2023.
But this comes with a cautionary warning from Mr Schlingmeier.
The high profits made by the ocean freight industry now need to be put to ”good use to improve services across the industry,” he said.
And this needs to be beyond traditional levels of investing in more container capacity.
“It also needs to go into landside infrastrcuture for cross-industry collaboration to build resilience for the industry.”
