Where Are All The Containers? Aug 2023

To read the full industry report with information, prices and hot shipping routes, click here: https://www.container-xchange.com/container-logistics-update/??

No time to read the full report? Read our short version below for our analysis of the latest trends and prices here.??

Asia

Overview of container prices??

Exports from the world's second-largest economy – China – have slumped for the eleventh consecutive month. While China-US export volumes have been decreasing since last year, exports from the major Asian economies to the US have been falling as well. But drop in China’s exports was the highest since COVID-19 broke out.?

On our platform, the average prices of a cargo-worthy 40ft container in the key ports of Asia were at their lowest in July 2023, when compared to their price development since 2021. The average price in Asia was $2,000. Interestingly, the price of the box saw the sharpest fall in Shanghai at a little over $1,000. It cost more than $4,000 only a year back.?

Drewry’s World Container Index – which measures the ocean freight rate movements of 40-foot containers in seven maritime lanes on a bi-weekly basis – recorded a 4% drop week-on-week in July for rates on the Asia-North Europe route. The average rate was $1,291 per 40ft container, 86% lower than in 2022. Under such circumstances, it does not seem likely that there will be a traditional ‘peak season’ on the Asia-North Europe route.???

But to make matters worse for the prospect of a peak shipping season, Maersk has imposed a 49% freight all kinds (FAK) rate increase on an Asia-North Europe trade route. This seems to be to tackle the problem of excess capacity in Europe. The carrier told its customers last month that it is raising its FAK rate from Asia to Rotterdam, Gdansk and Felixstowe to $1,900 per forty-foot equivalent unit (FEU), effective July 31. The significant increase is seen by industry experts as an attempt by Maersk to recover from its weeks of heavy discounting on this trade lane. There is also a chance that other routes might see increases after the carrier reassesses all its rate structures.?

India??

On our platform, the average price of a cargo-worthy 40ft container in some of the top ports of India was $1,541 with the price being $1,613 at Nhava Sheva. This time last year, the average price was $3,519, a whopping 54% decrease.

Carriers with services on India-US trade routes have imposed general rate increases (GRIs) this year, but with the drop in demand and a pressured cargo flow, GRIs have barely made a difference.? On the other hand, contract rates on India-Europe trade have been dropping. The Loadstar reported, "Month-on-month decline has been between 10% and 20%, data shows. For example, rates quoted by major carriers from Nhava Sheva/Mundra to Felixstowe/Rotterdam are down to $525/teu and $600/feu from the end-June trend line of $650 and $700."??

?Now, major container lines on the India-Europe trade lane are going to announce "steep" rate hikes, starting August. CMA CGM's freight-all-kinds (FAK) rates for cargo moving out of India to North Europe and the Mediterranean would be respectively $1,000 per teu and $1,200 per feu. Hapag-Lloyd will charge a base rate of $805/teu for dry shipments from Nhava Sheva/Mundra. The current rate is $280.? Base rate for high cube boxes at present is $110 but will rise up to $810 feu. MSC's FAK rates from Nhava Sheva to Antwerp/Valencia will be $700 per teu and $750 per feu, starting August.?

The Middle East??

Middle Eastern ports have been performing consistently well for the past couple of years. They ranked high yet again in the third edition of the global Container Port Performance Index (CPPI) 2022. It was published by the World Bank and S&P Global Market Intelligence earlier this year. The King Abdullah Port had topped the performance index last year, and Jeddah Islamic Port took the eighth position. Renewed and strong maritime and logistics sectors are now central to the Transport Strategy of Saudi Vision 2030, aimed at diversifying Saudi Arabia’s economy by 2030.?

Despite the high port performance and growth in volumes, ports in the Middle East have recorded a surprising drop in container prices. However, this is aligned with the global price decrease at the same time. According to our platform data as well, the average container prices in the Middle East were at the lowest in July since 2021. While the price in Jebel Ali was $3,183 in July 2022, it was $918 a year later, almost a 75% decrease.?

Europe???

Overview of container prices??

Across the three key ports in North Europe, our data recorded a sharp fall since 2022 in the average prices for cargo-worthy 40ft boxes. On an average, the prices had plummeted by 66.6% since 2022.?

Port of Antwerp recently reported a container decline of 5.9% year-on-year. The port handled 6.4 million TEUs in the first half of 2023, a 5.2% drop compared to the same months last year. Following Western sanctions on Russian businesses, the port of Hamburg continues to see an impact on its container throughput. Russia was the port’s fourth-largest trading partner until the war broke out. But after the war started, the port reported a 17% decrease in its container volume in the first quarter of 2023. On the other hand, China saw a 12.4% decrease in its June exports. There was a 1.3% decline in Asia-Europe volume in May.??

At the time of writing this report, data on June and July volumes were not available, but it is likely that they would record a contraction again. The decline was also reflected in Asia to EU shipping rates in June. For example, Rotterdam-Shanghai rates fell by 1%, even though Shanghai-New York rates increased by 5%. The fall in household consumption of goods in Europe continues to be one of the primary reasons behind the drop in exports from China as well as the falling rates.?

The US??

Overview of container prices??

June 2023 marked the lowest average container prices in key supply chain markets such as China, Europe, and the US, when compared to the same month in 2022 and 2021. This decline in container prices could indicate a further strain on profit margins for shipping companies. The average price of a cargo-worthy 40ft container in the main ports of the US was approximately $2,000, the lowest since July 2021.??

At the start of the second quarter this year, US imports totalled 1.7 million teus, down 21.5% from April 2022. Naturally, the throughput decline was bigger on the West Coast than on the East Coast. The West Coast ports had a 21.94% decline year-on-year, the East Coast -22.48% and the Gulf Coast, -13.65%. The West Coast ports also recorded roughly a 3.54% loss in market share, over 2% of which was diverted to the Gulf Coast and around 1.54% to East Coast ports. Retail sales are growing but as inventories remain high, the US apparel imports have been decreasing. Their volume has dropped by 28.2% compared to 2022. Inflation and a fall in consumer confidence are two other reasons for importing less cargo.??

And that’s a wrap! If you want more details about the global supply chains along with some smart container shipping routes, prices, pickup rates and the hot trading and leasing stretches on Container xChange, download our monthly research report here. Get your copy of the full report here: https://www.container-xchange.com/container-logistics-update/??

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