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Shipping Containers prices decline further in December, container availability scenario distressing

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Herons Logistics

Container xChange published its monthly Container Logistics report which sheds light on the decline in average container prices across major ports in China, US, Germany and UK from August to November. US prices have gone down by around 15% since August to November. The overall average container prices, after reaching a peak in September have been declining since then. Talking about the year 2021 for the supply chain, Dr. Johannes Schlingmeier, Co-founder and CEO, Container xChange said,

“2021 was an outstanding year for the shipping industry. The staggering earnings and profits for ocean freight companies have surpassed the combined industry profits made over the whole decade. It was also a year that showed that shippers were “willing” to pay higher prices for shipping.”

“Now, those earning and profits will need to prove that this money can be put to good use to improve service levels across the industry. This has to go beyond the traditional levers of investing in more container capacity – but also into landside infrastructure, inland transportation and infrastructure for cross-industry collaboration to build resilience for the industry.” Added Dr. Johannes.

Key Insights from the Monthly Container logistics report by Container xChange –

1. The Port of Qingdao has experienced the biggest drop in average prices between September and November. There, the average prices of 40 feet high cube container went down by more than 23%, equivalent to US $1756.

If you, instead, want to get your hands on a 40 feet high cube container at the Port of Ningbo, you’ll save around US $959 in November compared to September

2. Out of the 83 ports in different parts of the world, only 9 ports have CAx values less than 0.50. 74 ports have CAx values greater than 0.50. Compared to last year in 2020, 61 ports had CAx values less than 0.50. In the year 2019, 34 ports had CAx values less than 0.50.

This shows the current state of disrupted supply chain. Typically, this time of the year witnesses more containers in the US, North America, and the UK. With less containers at the Asian ports.

3. The average one-way leasing pickup rates Ex china to UK and Germany have declined after September till November and are expected to drop further.

Average one-way pickup charges for the China -US stretch have reduced 25% from August to September but have increased from October to November.

4. 14 ports in China registered decline in average prices for 40HC containers and a similar trend is observed for 20DC containers.

Average container prices (for 20DC, 40DC, and 40HC, cargo worthy) peaked in September and have been declining thereafter.
In Shanghai, the average prices for 40ft HC containers fell by 21% from US $6686 in September to US $5746 as on 1st December. In Tianjin, this drop was 16%, Yantian 12%, Shenzhen close to 7%, Qingdao 23%, and Dalian 11%.
Shanghai ranks third for average prices of 40 feet high cube container at $5746 as on December 1, 2021, after Livorno at $6700 and Singapore at $5775.
At Shenzhen, prices have reduced from $7005 in September to $6573 in November.

5. The average prices for a 40 feet high cube container have slashed at the following ports:

  • Rotterdam port – from US $4335 on 1st of October to $3506 on on 1st of December.
  • Antwerp Port – from US $4279 on 1st of October to US $4138 on 1st of December.
  • Hamburg Port – from US $4221 on 1st of October to US $3799 on 1st of December.

The average prices for 40 HC containers have slashed from US $4647 in September to US $4152 in November. This is a 10.6% decline.

6. In the United States, the average price of 40 feet high cube containers is $4709 in November from $4832 in October and for 20 feet dry containers is $2723 from $2802 in November.

Wrapping up the analysis for the last month of this year, Christian Roeloffs, Co-founder and CEO, Container xChange said,

“In the year 2021, COVID has caused unpredictable disruptions at ports and labor capacity throughout the supply chain. With new virus variants, these challenges stand to continue in the year to come. However, the “return to normal” seems to be coming earlier than many of us first anticipated – and it might be as early as the second half of 2022. Helping toward the return, are the container lines that reacted to the capacity crunch by buying and making use of a large number of second-hand vessels. On top of that, the production of containers has gradually increased, and the overall fleet size has gone up by around 10% in 2021. This growth was needed, for the industry to be able to keep up with the global trade volumes.

Going into the new year, we look into continued unpredictability. We’ve also started to see container prices and leasing rates going down. Once, prices slide significantly, they risk crashing. 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. But with disruptions such as labor union conflicts at US ports easing up, we’ll also see the capacity challenge improving.”

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