Container freight rates, which were hitting record prices at the height of the pandemic, have fallen rapidly, and container shipments on routes between Asia and the US have also collapsed, logistics data show.
The Ride Uphill
After two years of port congestion and container shortages, the disruption is now easing as Chinese exports slow amid slowing demand from western economies and a weaker global economy, logistics data shows. Freight rates for containers, which were hitting record prices at the height of the pandemic, have plummeted, and container shipments on Asia-US routes have also collapsed, data shows. “The retailers and the larger buyers or shippers are more cautious about the demand forecasts and are ordering less,” said Christian Roeloffs, CEO of logistics platform Container xChange.
Investment Trends
Drewry’s latest composite World Container Index — a key benchmark for container prices — is $3,689 per 40-foot container. That’s down 64% from the same time last September after the price fell for 32 straight weeks, Drewry said in a recent update. The current index is much lower than record prices of over $10,000 during the peak of the pandemic, but still remains 160% higher than pre-pandemic prices of $1,420.
According to Drewry, freight rates on the main routes have also fallen. Routes like Shanghai-Rotterdam and Shanghai-New York have seen their costs drop by up to 13%. Global port handling has also fallen. As Shanghai reopened after recent lockdowns, port traffic increased but was not enough to offset the “broader decline in port throughput levels,” Drewry said.
What Are The Changes?
“The European market is flooded with 40ft high cube containers. As a result, the region is witnessing a price drop for these boxes,” Container xChange said. Trends in logistics and supply chains over the past two years have reversed, logistics companies said. During this period, container shortages were constant due to delays in ports affected by lockdowns and increasing demand.
But now the demand for containers is falling and with it their prices, Seacube Containers chief sales director Danny den Boer said at the Digital Container Summit held earlier this month. Container idle times are also increasing, Andrea Monti, CEO of Sogese, said at the same conference.
“Containers are piling up in many import-oriented ports. Shippers give away containers just because containers are stuck there,” said Gregoire van Strydonck, Account Manager of Container xChange, at the conference. Arcon Containers Indian CEO Supal Shah said factories in China have halted production for the foreseeable future.
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Source: Dinaranland
