- Air is becoming one of the largest products inside the world’s containers as rates slump and consumer demand falters.
- In China, empty containers are stacking up at the nation’s largest ports, with management at many terminals now actively shifting surplus boxes to secondary ports to free up space.
- It comes at a time where the global number of metal boxes has hit record highs as lines rushed to order more containers during the supply chain pandemonium of the pandemic.
A recent news article published in the Splash 247 states that Ports in China and America point to container shipping’s current malaise.
The container availability index
The container availability index created by German box buying platform Container xChange measures the ratio of inbound to outbound containers port-wise. A reading above 0.5 suggests more inbound than outbound containers at ports in China including Shanghai, Ningbo, Tianjin and Shenzhen. As of February 5, the index read 0.64, an 11th straight week above 0.6.
Describing the current market outlook as “bleak”, Christian Roeloffs, CEO of Container xChange, noted the significant increase in empty containers littering China’s coastline over the past five months.
“The falling rates and increased availability of containers in certain regions of the world are indicative of weak demand and slower economic growth,” Roeloffs said in a market update yesterday.
Warning from Maersk
Maersk has warned this month that global box volumes could drop 2.5% this year, with Clarksons Research suggesting the figure could be even worse at -3.1%.
Across the Pacific from China, part of the reason for the empty containers piling up in Shenzhen and other Asian ports is explained in the latest throughput numbers from the likes of Long Beach, a city gearing up to host the largest TPM in history, container shipping’s annual big get-together.
The latest report from John McCown-led Blue Alpha Capital shows the 10 largest American box ports experienced the largest monthly inbound drop in volumes since the global financial crisis of 2008, down by 17.9%
January marks the seventh straight month of expanding year-over-year declines at American ports. West coast ports were even weaker with a decline of 23.5% in January.
Year over year comparisons can be augmented by comparisons to the same month in 2019 before any pandemic impact. Inbound loads this January compared to January 2019 equated to a four-year CAGR of negative 1.4%, according to Blue Alpha Capital.
Shippers and carriers are readying for next week’s TPM with contract negotiations expected to be very tough with long-term and spot rates both massively down over the same period a year ago.
Xeneta CEO Patrik Berglund commented earlier this month: “Global demand has fallen away, congestion has eased, equipment is available, and the macro-economic and geopolitical situations are, to say the least, complex.”
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Source: Splash 247
