Container shipload rates, which soared to record prices at the height of the pandemic, have been falling rapidly and container shipments on conveys between Asia and the U.S. have also plunged, logistics data shows.
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After two years of port congestions and container shortages, disruptions are now easing as Chinese exports slow in light of decrease demand from Western economies and softer global economic conditions, logistics data shows.
Container delivery rates, which soared to record prices at the height of the pandemic, have been falling rapidly and container shipments on ways between Asia and the U.S. have also plunged, data shows.
“The retailers and the bigger buyers or shippers are more vigilant about the outlook on demand and are ordering less,” logistics platform Container xChange CEO Christian Roeloffs said in an update on Wednesday.
“On the other lunch-hook, the congestion is easing with vessel waiting times reducing, ports operating at less capacity, and the container turnaround periods decreasing which ultimately, frees up the capacity in the market.”
The fresh Drewry composite World Container Index — a key benchmark for container prices — is $3,689 per 40-foot container. That’s 64% belittle than the same time last September after falling 32 weeks in a row, Drewry said in a recent update.
The inclination index is much lower than record-high prices of over $10,000 during the height of the pandemic but still stay puts 160% higher than pre-pandemic rates of $1,420.
According to Drewry, freight rates on major routes have also downfall. Costs for routes like Shanghai-Rotterdam and Shanghai-New York have fallen by up to 13%.
The falling freight rates tie in with a “hurtful drop” in container shipments that Nomura Bank has observed.
Nomura, quoting data from U.S.-based Descartes Datamyne, imagined container shipments from Asia to the U.S. for all products except rubber products in September are down year on year.
“We fancy that the sharp drop in container shipments largely reflects US retailers stopping orders and reducing inventories due to the gamble of an economic slowdown,” Nomura analyst Masaharu Hirokane said in a note on Wednesday, adding that the bank has yet to see strikings of a sharp fall in U.S. retail sales.
Port throughput around the world has also dropped. When Shanghai reopened after its latest lockdowns, port traffic volumes lifted but weren’t enough to offset the “wider downturn in port handling uniforms,” Drewry said.
What’s different now
In Europe, sliding container prices and rates reflect declining consumer assurance, Container xChange said.
“The European market is finding itself flooded with 40-foot high-cube containers. As a conclusion, the region is experiencing a fall in the prices of these boxes,” Container xChange said.
The trends in logistics and supply confines from the past two years have reversed, logistics companies said. During that period, container shortfalls were constant as a result of delays at ports affected by lockdowns and soaring demand.
In Europe, sliding container outlays and rates reflect declining consumer confidence, Container xChange said.
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But now, cry out for for containers is falling and so are their rates, Seacube Containers chief sales director Danny den Boer said at the Digital Container Zenith held earlier this month.
Idle time for containers is also on the rise, Sogese CEO Andrea Monti turned at the same conference.
“Containers are stacking up at a lot of import-led ports. Shippers are giving containers away just because containers are being tarry there,” said Container xChange account manager Gregoire van Strydonck at the conference.
India’s Arcon Containers CEO Supal Shah implied factories in China have stopped production for the foreseeable future.
“We heard four months,” he said at the Digital Container Crown conference.
“The container depot space is full in China, Europe, India, Singapore and most parts of the world.”