Container xChange’s monthly container logistics report highlighted the key trends driving the container shipping market’s volatility, from the fall in China’s exports in September to the global economic downturn, the war in Ukraine, lockdowns in China, and the recurring port strikes around the world.
According to Container xChange’s monthly container logistics report, the global container shipping industry is set to experience the typical boom and bust cycle in October, with overall slowed-down demand and a corresponding oversupply of containers.
Key trends
The report highlighted the key trends driving the container shipping market volatility, from the fall in China’s exports in September to the global economic downturn, the war in Ukraine, lockdowns in China, and the recurring port strikes around the world.
“What we now see is not unforeseen. The slowing down of demand and the glut of oversupply of containers are all a consequence of the disruptions caused by the outbreak of the pandemic. It is like the classic boom and bust cycle,” Container xChange CEO, Christian Roeloffs said, adding that the market experienced a “relatively low orders-to-inventory ratio. The retailers and the bigger buyers or shippers are more cautious about the demand outlook and are ordering less.”
Roeloffs further noted that on the other hand, “the congestion is easing with vessel waiting times reducing, ports operating at less capacity, and the container turnaround times decreasing which ultimately, frees up the capacity in the market.”
The report also underlined that many companies are trying to diversify their sourcing strategy, with Vietnam emerging as one of the key sourcing hubs.
Asia
According to Container xChange’s data, the price of a cargo-worthy 40 ft HC container in Ho Chi Minh City on September 22 was $3,643, the third highest on the platform.
This indicates a high demand for 40 ft HC containers at the port. Not just the prices, the average pick-up rate of a cargo-worthy 20 ft from the port of Ho Chi Minh to the US dropped from $321 to $117 as well.
The prices for cargo-worthy 40 DC boxes in the ports of China have seen a steady decline in 2022, nearly a 50% drop compared to the beginning of the year.
While the ports of India and Vietnam have seen a similar decline, the trading prices seem to have stabilised over the last two months showing an increase in demand for these boxes at the ports of Mundra, Nhava Sheva, and Ho Chi Minh City, according to the report.
Europe
Europe, on the other hand, has experienced an oversupply of 40 ft HC containers, driving a significant drop in container prices.
“As of September 21, 2022, the general average pickup and delivery (PU) charge for a 40 ft HC cargo-worthy box in the ports of Europe fell from $2,996 in August to $2,773 in September. The prices for the same were $3,281 in July this year,” the report revealed.
The US
According to the report, the PU charges from China to ports on the US East Coast have fallen dramatically, driven by a rise in demand from shippers.
“For cargo-worthy containers (20 ft, 40 ft, and 40 ft HC), the PU charges fell from $1,473 in August to $940 in September for the Port of New York. At the same time, for the Port of Savannah, the drop was from $1,211 to $874,” it read.
At the beginning of 2022, PU charges from China to the ports on US West Coast were running considerably high at nearly $3000 for cargo-worthy containers.
Nevertheless, with the logjams at ports clearing up the PU charges started to drop gradually.
“For cargo-worthy containers (20 ft, 40 ft, and 40 ft HC) from China to Los Angeles, the PU charges fell from $1,664 in August to $1361 in September,” the report noted, adding that the port of Oakland saw rates dropping from $1,514 to $1,156.
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