Where Are All the Containers?April edition(reporting on March)

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No time to read the full report? Read our short version below?

Asia?

Overview of container prices in March and April in Asia?

A metric created by Container xChange, CAx is the tool or index which we use to measure?the import and export of full containers around the major ports of the world. When we looked at the CAx?values for 40ft containers at some of the major ports in Asia and noted that all of them scored higher than 0.50. This means that more containers are entering all these ports than moving out. And while we saw increasing CAx, we also noted decreasing prices, thereby reflecting how the oversupply is resulting in low prices for the containers. The average price for a cargo-worthy 40ft container on our platform was anywhere between $1,500 to $1,700 in most parts of Asia.?

According to March’s forecaster created by Container xChange, charges from China to Southeast Asia saw a major slump of 84% from $559 in January 2023 to $91 in March 2023 and a 90% year-over-year drop from $899 in March 2022. This is an evident indicator of increased Intra-Asia trade.?

And in April, ports in China were the most popular trading locations. Vietnam, Indonesia and Singapore followed suit. China to Russia was our most popular stretch and the average pickup (PU) charge for leasing a container in the route was $905. For example, the average PU rate from Ningbo to Moscow was $985 and the same from Shanghai was $830. After Russia, the popular destinations from China included North America and North Europe.?

China Plus One: Suitable time for intra-Asia trade?

Plummeting demand and rising inflation led to an oversupply of containers in China last year.? This, in turn, resulted in depots in the country reportedly working on 90% utilization in Q1 2023. An oversupply also makes it harder for the depots to move boxes. And because depots make money by moving these boxes as opposed to storing them, the current circumstances are rendering the depots inefficient in both their operations as well as revenue generation.??

But at the same time, there is good news for intra-Asia trade as businesses across the world are now launching projects to diversify the global supply chains. The China Plus One strategy is expected to facilitate a more integrated trade chain among Asian countries. The China-Southeast Asia trade is seen to be emerging as a strong economic partnership this year. China is also developing strategic ties with the Middle East and Russia, thereby underlining why the country is still one of the strongest geopolitical and economic facilitators in the world.?

The Indian Sub-continent and Middle East?

Overview of container prices in ISC & ME?

In the Indian sub-continent and the Middle East on the other hand, it is a suitable time to buy containers right now. The prices of standard containers have been steadily dropping. For example, the average price of a cargo-worthy 20ft container at ISC and ME was $1,200 in March. For a cargo-worthy 40ft container, it was $1,860. Only six months back, it was 38% more expensive to buy this box.?

There are many containers available at the ports of Mundra, Chittagong and Jebel Ali. But the Chittagong port has a high CAx score of 0.91. The port authority of this prime seaport of Bangladesh issued an official notification last month inviting cargo carriers up to 200-metre length and 10-metre draught to take berth at the jetties. With the new length and water draught, over 3,000 TEU vessels will be able to come to Chittagong.???

A new dawn in the East??

Container fleet operations in the Indian subcontinent and the Middle East have only been growing. Hapag-Lloyd suspended the China-Germany Express (CGX) service and redeployed ships on the transatlantic service instead. On the other hand, COSCO and OOCL launched a Southeast Asia-India-US East Coast service in December 2022 after closing a China-Vietnam-US East Coast loop.??

CMA CGM Group has also announced the launch of the new Bangladesh India Gulf Express (BIGEX) service. BIGEX will start sailing from the port of Chittagong on April 5, 2023, and will offer Bangladesh and India a direct connection with the Gulf. And Maersk has created a new shipping region altogether. The company integrated two emerging markets – West & Central Asia and Africa – to form a new combined IMEA region. This new region will entail core parts of the Indian subcontinent, the Middle East, and Africa, and the primary markets will be India, Pakistan, the UAE, Saudi Arabia, South Africa, Kenya, Ivory Coast, Cameroon, Nigeria, Senegal, and Ghana, amongst others.??

The US?

Overview of container prices in the US?

In stark contrast, our data noted a substantial drop in the CAx values for the major US ports in March compared to January. For example, the CAx score of the port of New York fell from 0.92 in January to 0.84 in March; Savannah from 0.88 to 0.72; and Los Angeles from 0.83 to 0.76. This means that so far in 2023 Q1, ports in the US are managing to clear their congestion. And one important factor leading to this easing of congestion is also that imports – or containerised cargo in general – to the US have dropped. The share of imports from the total volumes handled at the ports of Los Angeles/Long Beach has fallen 10% compared to last year.??

As for the prices, the average price of a cargo-worthy 40ft container in the US is steadily dropping this year. It was $2,180 as of March. Meanwhile, Savannah had the cheapest average market price for a cargo-worthy 40ft container at $1,880, a 40.5% drop from January. Los Angeles, on the other hand, had the highest price for the box at $2,260 in March. This is still a 20.6% drop compared to the average price in January.?

Imports to the US drop further?

China represented 36.5% of the total US container imports. However, Chinese imports to the US showed a downward trend in February 2023, with a decrease of 17.1% (632,702 TEUs) since January.??

But we did see a slight rebound in April although imports have remained below 2022’s levels. Shippers and retailers are preparing for a new sale season and taking stock of their inventories. With low demand, the freight rates continue to be low as well. Cancelling services have managed to raise the falling spot rates to an extent, but they have not succeeded in improving demand.??

Container traffic in the East Coast vs West Coast ports?

The negotiations between the International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) to renew their labour contract began in May last year, but the talks have not reached a conclusion yet. This pressures cargo flow. The West Coast dockworkers are currently operating without a contract and cautious shippers want to avoid any pressure on cargo flow because of it. They are trying to shift cargo to East and Gulf Coast ports. As a result, the biggest port in the US, the Port of Los Angeles, handled 726,014 TEUs in January, a 16% year-over-year decrease.??

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.?

Get your copy of the full report here(https://www.container-xchange.com/reports/monthly-container-logistics-update/)?