After two years of shipping grunts, things are starting to change

Container freight rates, which hit record prices at the height of the pandemic, fell rapidly and container shipments on routes between Asia and the United States also fell, according to logistics data.

Anucha Sirivisansuwan | time | Getty Images

After two years of port congestion and container shortages, the disruptions are easing as Chinese exports slow amid weaker demand from Western economies and weaker global economic conditions, according to logistics data.

Container freight rates, which hit record prices at the height of the pandemic, fell rapidly and container shipments on routes between Asia and the United States also fell, the data showed.

“Retailers and larger buyers or shippers are more cautious about the demand outlook and are ordering less,” logistics platform Container xChange CEO Christian Roeloffs said in an update on Wednesday.

“On the other hand, congestion is easing with reduced ship waiting times, ports operating at lower capacity and container turnaround times decreasing, which ultimately frees up capacity on the market.”

CNBC Pro Stock Picks and Investing Trends:

Drewry’s latest Global Container Composite Index – a key benchmark for container prices – is $3,689 per 40ft container. That’s 64% lower than the same period last September after a 32-week slump, Drewry said in a recent update.

The current index is well below record prices of over $10,000 at the height of the pandemic, but still remains 160% above pre-pandemic rates of $1,420.

According to Drewry, freight rates on major routes have also fallen. Costs for routes like Shanghai-Rotterdam and Shanghai-New York have fallen by up to 13%.

The fall in freight rates is linked to a “sharp decline” in container shipments observed by Nomura Bank.

Nomura, citing data from US company Descartes Datamyne, said container shipments from Asia to the US for all but rubber products in September were down year on year. ‘other.

“We assume the sharp decline in container shipments largely reflects the halt in orders from U.S. retailers and reduced inventory due to the risk of an economic downturn,” Nomura analyst Masaharu Hirokane said in a note on Wednesday. , adding that the bank has yet to see any signs of slowing down. a sharp drop in retail sales in the United States.

Port throughput around the world has also dropped. When Shanghai reopened after its recent shutdowns, port traffic volumes increased but were not enough to offset the “wider decline in port handling levels”, Drewry said.

What’s different now

In Europe, falling container prices and tariffs reflect declining consumer confidence, Container xChange said.

“The European market finds itself inundated with 40-cubic-foot-high containers. As a result, the region is seeing lower prices for these boxes,” Container xChange said.

Logistics and supply chain trends of the past two years have reversed, logistics companies said. During this period, container shortages have been constant due to delays at ports affected by closures and high demand.

In Europe, falling container prices and tariffs reflect declining consumer confidence, Container xChange said.

Nurphoto | Nurphoto | Getty Images

But now demand for containers is falling, and so are their prices, Seacube Containers sales manager Danny den Boer said at the Digital Container Summit held earlier this month.

Container idle time is also increasing, said Andrea Monti, CEO of Sogese, at the same conference.

“Containers are piling up at many import ports. Shippers are giving containers away simply because containers are stuck there,” Gregoire van Strydonck, Container xChange account manager, said at the conference.

Arcon Containers Indian CEO Supal Shah said factories in China have halted production for the foreseeable future.

“We heard four months,” he said at the Digital Container Summit conference.

“Container drop-off space is full in China, Europe, India, Singapore and most parts of the world.”

By Admin

Leave a Reply

Your email address will not be published. Required fields are marked *