New Articles

November 2024 U.S. Container Imports Show Softer Seasonal Decline

global trade rates freight import

November 2024 U.S. Container Imports Show Softer Seasonal Decline

Descartes Systems Group, the global leader in uniting logistics-intensive businesses in commerce, released its December Global Shipping Report for logistics and supply chain professionals. In November 2024, U.S. container import volume decreased 5% from October 2024, which is consistent with seasonal month-over-month declines seen in previous years, though smaller than the 9% decrease over the same period in 2023. Imports from China also declined, though November volumes are 13.3% higher than the same month in 2023, underscoring the continued strength of U.S.–China trade. The December update of the logistics metrics monitored by Descartes continues to demonstrate the strong performance of container imports in 2024; however, the potential introduction of new tariffs by the incoming Trump administration, stalled ILA/USMX contract negotiations, and the ongoing conflict in the Middle East may put pressure on global supply chains throughout the balance of the year.

Read also: September 2024 U.S. Container Imports Mark Third Consecutive Month of Elevated Volumes

At 2,368,758 twenty-foot equivalent units (TEU), November U.S. container import volume dipped for the first time in four months below 2.4 million TEUs—a level that previously led to port congestion and delays during the pandemic (see Figure 1). Versus November 2023, volume in November 2024 was higher by 12.8%, and up a significant 24.6% from pre-pandemic November 2019. Notably, total imports for the first 11 months (25,829,192 TEUs) of 2024 have already surpassed the 12-month total (24,957,640 TEUs) for 2023—by 871,552 TEUs or 3.5%.

Figure 1. U.S. Container Import Volume Year-over-Year Comparison

A graph of different colored linesDescription automatically generated
Source: Descartes Datamyne™

“November has traditionally been a softer month than October; however, compared to the past six years, this year’s month-over-month decline is the smallest by volume (down 125,877 TEUs) (see Figure 2),” said Jackson Wood, Director, Industry Strategy at Descartes. “While front-loading shipments due to heightened uncertainty around labor unrest and tariffs is a possibility, U.S. container import volumes have been exceptionally strong over peak season this year and, overall, robust throughout 2024.”

Figure 2: October to November U.S. Container Import Volume Comparison

A screenshot of a computer screen

Description automatically generated

The December report is Descartes’ fortieth installment since beginning its analysis in August 2021. To read past reports, learn more about the key economic and logistics factors driving global shipping, and review strategies to help address it in the near-, short- and long-term, visit Descartes’ Global Shipping Resource Center.

port center global trade ship marine container price market port tt club coast port import

TT Club Stresses Ongoing Efforts to Prevent Container Losses at Sea

Container losses at sea remain a persistent challenge, often exacerbated by severe weather conditions. TT Club, a leading international freight insurer, continues to collaborate with the container industry to mitigate these incidents.

Read also: Neglecting Container Seals Undermines Cargo Security, Warns TT Club

The World Shipping Council’s annual survey highlights a record low in container losses for 2023, with 33% of lost units later recovered. Despite this positive trend, TT Club’s analysis points to weather as the most significant factor behind these losses, emphasizing the complexity of the issue.

TT Club has been actively involved in the MARIN TopTier Joint Industry Project, which brings together over forty industry and governmental stakeholders to address the causes of container loss. The project has already provided crucial guidance on mitigating risks like parametric roll.

Peregrine Storrs-Fox of TT Club underscores the importance of responsibility across the entire freight supply chain, from accurate cargo weight verification to proper load distribution. Discrepancies in stow planning and environmental factors like wave period also play critical roles in container stability.

Innovative technological solutions are being explored, including enhanced monitoring systems and redesigned lashing mechanisms, to better predict and manage container movement.

As container losses cannot be entirely prevented, TT Club continues to advocate for safer practices and technological advancements to reduce risks and enhance the overall safety of global logistics.

global trade container

Top 25 Container Ports In The United States

Imagine a major highway with poorly timed traffic lights. Everything slows down, causing delays and frustration. Ports in the United States are like those highways, and excellent container cargo operations are like well-timed traffic lights. They keep everything moving smoothly and efficiently.

Read also: May 2024 U.S. Containerized Imports Break 2.3M TEUs

This is important beyond port terminals because they are major economic hubs, handling a massive amount of cargo coming in and out, feeding the country’s consumer goods and industrial needs. Efficient operations ensure a smooth flow of goods, which keeps businesses running and shelves stocked. Delays at ports can disrupt supply chains and lead to price hikes for consumers.

Efficient port operations are also important beyond U.S. borders as the nation competes with other countries for international trade. Ports with fast turnaround times make the U.S. a more attractive destination for shippers. This translates to more revenue and jobs in the U.S. economy.

When it comes to gauging the top U.S. ports in the container sector, we must look at total twenty-foot equivalent units (TEUs) handled. Based on the size of a standard 20-foot long shipping container, a TEU is the standard unit used to measure the capacity of vessels and terminals. One 20-foot container is equal to one TEU and large 40-foot containers are counted as two TEUs.

Do you know who uses TEUs to determine the busiest container ports in the U.S.? None other than the U.S. Department of Transportation, whose 2024 Port Performance Freight Statistics Program Annual Report to Congress includes a list of the Top 25 Container Ports ranked by TEU. That list follows with Global Trade’s own analysis of why each port made the cut.

1. PORT OF LOS ANGELES, CA 

The busiest container port in the U.S. processes a massive amount of containers, moving more than 9 million TEUs annually. The operation is divided among seven major container terminals, each equipped to handle the loading and unloading of container ships. The Cargo Operations Dashboard web portal provides real-time data on various aspects of cargo movement, such as truck activity at terminals and vessel locations. For moving containers inland, the port connects to a vast rail network with six intermodal rail yards, a key route being the Alameda Corridor, a 20-mile express railway that zips containers directly to rail hubs in downtown L.A.

2. PORT OF LONG BEACH, CA

L.A.’s sister container cargo powerhouse also handles millions of TEUs annually. Unlike some ports that directly manage cargo movement, Long Beach operates as a “landlord port,” with private terminal operators performing the day-to-day operations of loading and unloading container ships at various terminals. The port caters to a diverse range of containerized cargo, with terminals specializing in different goods. This allows them to handle a wider range of imports and exports efficiently. The POLB is at the forefront of adopting sustainable practices, having implemented zero-emission cargo handling equipment like electric yard tractors, reducing dependence on fossil fuels.

3. PORT OF NEW YORK AND NEW JERSEY, NY & NJ

The largest containerized cargo port on the East Coast boasts a vast operation spread across six terminals and public berths, equipped to handle the world’s biggest container vessels. Like other major ports, NY/NJ prioritizes efficient cargo movement. Third-party logistics providers (3PLs) play a crucial role, offering services like consolidation (combining smaller shipments into full containers) and deconsolidation (separating a full container into individual shipments) to streamline the import and export process. The Port Authority of New York and New Jersey participates in the World Port Sustainability Program, demonstrating a commitment to environmentally conscious practices alongside the cargo handling operations.

4. PORT OF SAVANNAH, GA

Savannah boasts the largest single-terminal container facility in North America, covering over 1,300 acres and equipped to move millions of tons of containerized cargo annually. The port is well-equipped with 42 container cranes (with a target of 42 by 2028) and more than150 rubber-tired gantry cranes to handle the loading and unloading of containers swiftly. Savannah offers direct access to major highways (I-95 and I-16) and on-terminal rail facilities ensure seamless cargo movement. As the most westerly port on the Atlantic seaboard, Savannah offers shorter transit times for cargo destined for major inland markets in the southeastern United States. 

5. PORT OF VIRGINIA, VA 

Another major force in containerized cargo handling on the East Coast, Virginia has seen significant growth in recent years, with a focus on expansion and efficiency. They recently completed a $750 million expansion project that increased cargo capacity by 46 percent. Thanks to its deepwater channels and ongoing dredging projects, the port can accommodate the largest container vessels currently operating. The port utilizes semi-automated container terminals with advanced cranes to expedite cargo handling. Norfolk International Terminals is the largest terminal and will boast more than 90 semi-automated cranes upon completion of its expansion. The port offers excellent multimodal connections.

6. PORT HOUSTON, TX

The port boasts two state-of-the-art container terminals: the Bayport Container Terminal and the Barbours Cut Container Terminal. These facilities are equipped to handle the modern giants of container shipping efficiently. Port Houston is investing $750 million over five years (through 2027) to upgrade the Bayport Container Terminal’s infrastructure and capabilities—a commitment to handling more containers and larger vessels in the future. Houston’s extensive highway network and role as a major trucking hub in the U.S. contribute to the efficient movement of containers inland after they are offloaded from ships. The port also offers on-site rail connections for seamless cargo movement.

 7. PORT OF CHARLESTON, SC 

Charleston has seen significant growth in recent years, becoming the fastest-growing container port in the U.S. Major investments are being made to handle the largest container vessels. The Charleston Harbor deepening project, completed in 2021, allows the port to accommodate all post-Panamax ships (the biggest ones!) 24/7, boosting its competitiveness. The port’s container operations are spread across several terminals, including the North Charleston Terminal, the Wando Welch Terminal and the recently opened Hugh Leatherman Terminal. The South Carolina Ports Authority offers various tools like GO!Port, a system for tracking and tracing container cargo, providing real-time data and enhancing supply-chain visibility. 

8. PORT OF OAKLAND, CA 

Oakland has seen steady growth in container traffic, with a particular surge in imports in recent years. Terminals are equipped to handle this increasing volume efficiently. The port has strategically invested in infrastructure to accommodate the giants of the sea. Oakland routinely receives calls from ships with capacity for 14,000 containers and can handle even larger vessels with the necessary adjustments. Oakland prioritizes swift cargo movement. They boast some of the highest ship-to-shore crane productivity rates on the West Coast, meaning they can load and unload containers quickly.

9. PORT OF TACOMA, WA 

Among the largest deepwater ports in America, Tacoma is situated on Commencement Bay in Puget Sound, making it geographically well-positioned. The port serves as a vital gateway for cargo moving between Asia and the eastern U.S., with more than 70% of its international cargo directed toward these regions. Additionally, Tacoma handles around 80% of the marine cargo between Alaska and the Lower 48 States. Various sustainability programs are in place to reduce emissions from port operations and promote environmentally responsible cargo handling practices.

10. PORT OF SEATTLE, WA

The Port of Tacoma and Port of Seattle are managed by the Northwest Seaport Alliance, a collaboration that strengthens their overall container handling capabilities. The Port of Seattle handles millions of TEUs annually across several terminals. Efficiency is a priority there, with trucks and on-site rail connections ensuring swift movement inland. Sustainability efforts are also in place to balance economic activity with environmental responsibility.

11. PORT OF JACKSONVILLE, FL

JAXPORT, as the port’s authority and the port itself are known, ranks first among Florida’s ports for containers. The Dames Point Terminal efficiently handles millions of TEUs with connections to major highways and on-dock rail for seamless cargo movement throughout the U.S. Southeast.

12. PORTMIAMI, FL 

Known mostly for cruise ships, PortMiami handles containers, too. Cargo moves efficiently through its container terminal with connections to highways and rail for regional distribution.

13. PORT OF SAN JUAN, PR

Puerto Rico’s main port prioritizes container cargo. Three major shipping lines call there, utilizing a “carousel” crane system to efficiently load and unload containers destined for or arriving from the U.S. mainland. 

14. HONOLULU HARBOR, HI

The O’ahu facilities not only handle container cargo, they recently expanded their container terminal capacity by 40% to handle increasing volumes and improve efficiency for island trade.

15. PORT OF BALTIMORE, MD

Baltimore boasts the No. 1 container terminal on the East Coast (Seagirt Marine Terminal) with super-post-Panamax cranes and swift container handling. They handle millions of TEUs annually.

16. PORT EVERGLADES, FL

The port has a reputation for efficiently moving millions of TEUs with quick ship turnaround and connections to highways and rail.

17. PORT OF PHILADELPHIA, PA

PhilaPort’s Packer Avenue Marine Terminal is the main hub for container cargo, with rail and highway connections for efficient inland transport.

18. PORT OF MOBILE, AL

Mobile boasts fast ship turnaround with 35 container lifts per hour and 45-minute truck wait times.

19. PORT OF ALASKA, AK

Alaska’s main cargo handler in Anchorage sees twice-weekly container ships delivering essential goods for most of the state.

20. PORT OF NEW ORLEANS, LA

New Orleans’ Napoleon Avenue Terminal handles more than 600,000 TEUs annually with cranes for mega-ships up to 10,000 TEUs.

21. PORT OF WILMINGTON, NC

The North Carolina port efficiently handles containers with seven cranes, including neo-Panamax models for large ships, offering easy access to highways for distribution.

22. PORT OF WILMINGTON, DE

The Delaware port boasts a 500,000 TEU annual capacity with four gantry cranes and efficient rail connections for onward transport.

23. PORT OF PALM BEACH DISTRICT, FL

Florida’s fourth busiest container port handles more than 290,000 TEUs with 24/7 on-dock rail for smooth container movement.

24. SOUTH JERSEY PORT CORPORATION, NJ

The operator of marine shipping terminals in seven New Jersey counties focuses mostly on breakbulk and bulk cargo, but it does have cranes for containers.

25. PORT OF BOSTON, MA

Boston’s Paul W. Conley Terminal specializes in container cargo, with gantry cranes and automated stacking cranes for efficient loading and unloading.

 

global trade container

United States Sees Transport Container Imports Drop to $999M in 2023

U.S. Transport Container Imports

After two years of growth, supplies from abroad of transport containers decreased by -8.6% to 598K units in 2023. Over the period under review, imports, however, saw a prominent expansion. The most prominent rate of growth was recorded in 2021 when imports increased by 188%. Imports peaked at 655K units in 2022, and then fell in the following year.

Read also: U.S. Container Imports Surge in June 2024 Amid Port Labor Stalls

In value terms, transport container imports fell notably to $999M (IndexBox estimates) in 2023. Overall, imports, however, recorded strong growth. The pace of growth appeared the most rapid in 2021 with an increase of 101%. Imports peaked at $1.5B in 2022, and then contracted significantly in the following year.

Imports by Country

In 2023, China (314K units) constituted the largest supplier of transport container to the United States, with a 52% share of total imports. Moreover, transport container imports from China exceeded the figures recorded by the second-largest supplier, Germany (34K units), ninefold. the Netherlands (20K units) ranked third in terms of total imports with a 3.3% share.

From 2020 to 2023, the average annual growth rate of volume from China amounted to +60.1%. The remaining supplying countries recorded the following average annual rates of imports growth: Germany (+67.9% per year) and the Netherlands (+2.0% per year).

In value terms, China ($707M) constituted the largest supplier of transport containers to the United States, comprising 71% of total imports. The second position in the ranking was held by the Netherlands ($65M), with a 6.5% share of total imports. It was followed by Germany, with a 3.9% share.

From 2020 to 2023, the average annual rate of growth in terms of value from China amounted to +37.1%. The remaining supplying countries recorded the following average annual rates of imports growth: the Netherlands (+17.0% per year) and Germany (+21.7% per year).

Import Prices by Country

In 2023, the transport container price stood at $1,670 per unit (CIF, US), waning by -25.6% against the previous year. In general, the import price saw a abrupt downturn. The pace of growth was the most pronounced in 2022 when the average import price increased by 20% against the previous year. Over the period under review, average import prices reached the peak figure at $2,689 per unit in 2020; however, from 2021 to 2023, import prices stood at a somewhat lower figure.

There were significant differences in the average prices amongst the major supplying countries. In 2023, amid the top importers, the country with the highest price was Mexico ($3,258 per unit), while the price for Japan ($236 per unit) was amongst the lowest.

From 2020 to 2023, the most notable rate of growth in terms of prices was attained by Mexico (+32.0%), while the prices for the other major suppliers experienced more modest paces of growth.

Source: IndexBox Market Intelligence Platform 

port center global trade ship marine container price market port tt club coast port import

Will the H1 Boom Continue in H2 of 2024 for the Container Logistics Industry?

Container xChange, the leading digital marketplace for container trading and leasing, has released its mid-year container market forecaster. The analysis delves into container price developments in H1 2024 and offers a market outlook for H2 2024.

Read also: May 2024 U.S. Containerized Imports Break 2.3M TEUs

“As we move into July, we’re seeing a continued rise in freight rates, container prices, and leasing rates, driven by ongoing geopolitical tensions and resulting supply chain disruptions. The diversions around the Cape of Good Hope and the resulting congestion in major ports have created a perfect storm, causing importers in the US and Europe to pull forward orders in H1 typically reserved for Q3. This has led to a notable supply-demand imbalance. While we might see a peak in July followed by a reduction in freight rates due to easing congestion and reduced demand, the ongoing conflict in the Middle East and potential new disruptions, such as labor strikes, could prolong these challenges. The container shipping industry remains on high alert, adapting to an ever-changing landscape.” Inferred Christian Roeloffs, cofounder and CEO, Container xChange

H1 2024 Container rates Recap

Globally, shipping costs have surged in the first half of 2024, defying the traditional off-season lull

Asia and Middle East and ISC region were the regions that witnessed a significant uptick in container prices since October 2023 due to the Houthi attacks.

On the other hand, container prices remained stable or decreased, reflecting an abundance of containers in traditional import destinations. These prices have now begun to move upwards. Our mid-year forecaster gives a review of global container price developments to offer greater visibility into the trends observed during the first half of the year.

Main destinations that experienced significant container price upticks in H1’2024 

Average container prices continue to rise through May and in June. Hong Kong and Vietnam experienced the biggest month on month percentage spike of 35% from May to June for trading containers, followed by China (27%), Russia (24%), Taiwan (23%) and Malaysia (23%). 

India also faced a rise in average container prices spiking by 21% from May to June 2024. In Singapore, while there has been a steady rise of 31% in container prices since October 2023, the increase from May to June 2024 was a more moderate 7%.

In terms of the impact of the Houthi attacks, China stood out by a significant leap at 78% container price hike from October’23 to June’24, followed by Hong Kong (77%), Spain (42%), Uzbekistan (40%) and Thailand (35%). 

Malysia (29%), Netherlands (29%), Taiwan (28%) and Vietnam followed the pack of biggest price increases since October for container prices. (40 ft high cube, cargo worthy containers)

global trade container

China and Hong Kong have the highest average container prices currently across the world, namely, $3600 and $3124, respectively. 

Region-wise analysis of Impact of Houthi attacks on container price development

To understand the trajectory of container prices development, it becomes important to study the impact that Houthi attacks have had on these. Here is a region-wise impact analysis on the container prices pre-Houthi attacks and until June 2024. 

global trade container

Northeast Asia region witnessed the biggest price increase of 69% since October 2023, with China, Hong Kong and Taiwan registering significant price hikes, indicating robust demand for containers.  

Container prices have been on an upward trajectory across Central Asia, the Middle East, the Indian Subcontinent (ISC) region, Japan and Korea and both Northeast and Southeast Asia. 

Tony Yu, president, Baiscon Shipping Line Hong Kong Co., Limited with the company headquartered in China and one of our top sellers in the US shared exclusive insights from the ground.

“From January to June of 2024, containers in the North American market were in a state of clearing inventory and prices showed signs of rising. It will continue to rise in the next few months, which is in line with the increase of container purchase price in the Chinese Mainland. The high cost of container procurement and container leasing lead to almost no difference between SOC freight and COC freight. Based on this performance, the lack of containers in some cities in North America is inevitable, which will drive up the sales price of containers.”

Looking into the second half of 2024, Tony expressed optimism tempered by practical challenges.

Discussing significant market drivers and developments for the second half of 2024, Tony emphasized, ” We need to consider several factors that affect the market: the Red Sea crisis and the subsequent diversions and the situation of China’s own foreign trade exports. If the situation does not improve, it will lead to strong container sales in North America. However, the influence of exchange rates cannot be ruled out. Should the Federal Reserve lower interest rates, the resulting appreciation of RMB could potentially have an auxiliary effect on the stability of container prices. Personally, I feel that there will not be too much change in the second half of the year”

Building on these insights, Daniel Nee, President of Holyidea Logistics Equipment Manufacture Co., Ltd., (a Container xChange customer based in China) emphasizes the ongoing complexities and unpredictability in the global landscape as pivotal factors which will continue to influence the container industry in the second half of 2024. 

“As we look ahead to the second half of 2024, the global situation remains highly complex and unpredictable, leading us to anticipate further challenges in the container industry. The most significant factor shaping the market will be the geopolitical risks, and we must wait for changes on the global stage before making any definitive industry judgments. My advice to peers is to approach the market with patience and resilience. We are preparing for these uncertainties by waiting quietly and observing the evolving global context.” 

Container market remains bullish of further price hikes

global trade container

The first half of 2024 saw the Container Price Sentiment Index (xCPSI) reach an all-time high, and it remains elevated throughout the last six months, indicating a strong sentiment for rising container prices expectations in the upcoming second half of the year.

United States: Container demand spikes, container prices begin to rise

“In recent months, the US container trading market has significantly slowed, primarily due to sharp price increases. Container sellers in the US have held onto stock, anticipating higher prices, while container buyers in US have adopted a cautious stance, awaiting potential price drops. This cautious market behavior has affected our container buyer’s purchasing decisions. There are several factors at play, with a significant impact on the US market, being the impending election and discussions surrounding potential tariffs on Chinese goods. This has spurred heightened demand for shipping containers, driving prices upwards and creating market uncertainty, which in turn has deterred buyers from making immediate purchases. Additionally, the extended route due to the Red Sea situation has exacerbated supply chain disruptions, further influencing market dynamics.” commented Isabella Zomignani, Associate Account Manager, Americas, Container xChange. 

 Asia continues to grapple with rising container prices and leasing rates in July

Average prices for 40 ft high cube containers (cargo worthy) in China

global trade logistics

“In June, we’ve observed a continued rise in container prices in China, impacting both trading and leasing activities. The scarcity of available slots for China-Europe and China-USA routes has intensified, prompting offline suppliers to offer competitive prices to attract customers. This temporary price decrease reflects urgent liquidity needs among suppliers. Moving forward, we anticipate prices to rebound next month as slot availability tightens again.” shared Haoze Lou, broker team, Container xChange

Market Outlook: H2 2024

The market outlook for the second half of the year is heavily contingent on a revival in consumer demand. Several factors will influence this period, including ongoing geopolitical disruptions and potential labor unrest.

Firstly, we foresee the Houthi attacks to continue and disrupt supply chains with no foreseeable resolution, exacerbating market uncertainties. Additionally, labor unrest in the US east and gulf ports remains a significant potential disruption, with the possibility of flare-ups impacting supply chains further in the latter half of 2024.

However, if the current market conditions persist without major changes, we expect container rates to ease. This reduction in rates could trigger an uptick in container buyer activity, as the buyer side is currently waiting for prices to decline before resuming trading and leasing activities.

Furthermore, according to Alphaliner, the global container fleet grew by 10.6% between June 1, 2023, and June 1, 2024. We anticipate that the introduction of more container fleets into the market will help alleviate some of the price pressures, potentially stabilizing the market and fostering increased trading activity.

Visit Container xChange Market Intelligence Hub for similar analysis and reports.  

 

   

 

port center global trade ship marine container price market port tt club coast port import

Container Price Bubble Expected to Burst in H2 2024 Amid Shaky Consumer Confidence

Container xChange today unveiled its June container market forecaster, revealing trends and insights that are shaping the global container shipping market. The forecaster highlights the dramatic rise in container prices in China recently, which surged by 45% in May. Meanwhile, container prices have remained relatively stable in the US and Europe. 

Read also: Ocean Freight Container Rates Soar Amid Global Supply Chain Disruptions

Key findings also include insights into the impact of port congestion and carrier network changes on market dynamics, the cautious restocking behavior of US retailers, and the year-to-date growth in inbound TEUs at major US ports.

China’s volatile container prices surge amid early peak season

The container trading market in China has been highly volatile throughout the month of May, with container prices rising beyond expectations. Average container prices for 40 ft high cube cargo-worthy containers across key ports in China rose by 45% in May, from $2240 in April to $3250 in May 2024. These were around $1698 in November 2023 and around $7178 in September 2021 (at the height of the Covid boom). 

global trade container price

Chart 1: Average container price trends across key ports in China for 40 ft High cube cargo-worthy containers

Capacity shortage and unexpected demand increase are main drivers of price surge 

The surge in container prices is driven by a significant lack of capacity (containers and vessels) that coincides with an unexpected increase in demand for capacity.

Firstly, capacity is low because of Red Sea diversions stretching carriers’ networks thin—essentially carriers wanting to maintain weekly sailings have to deploy additional vessels on their Asia-Europe loops. This decreases the margin for error—making the management of unexpected disruptions very challenging. 

Moreover, the diversions and the subsequent “rebalancing” of carrier networks have led to downstream disruptions like port congestion as short-term changes in carrier networks and “vessel bunching” have led to some ports facing spikes in throughput. Similar to what can be expected on a highway, throughput spikes then lead to traffic jams—here of vessels and containers. 

Secondly, we have seen an unexpected increase in demand for capacity—as shippers are pulling shipments forward in order to avoid the uncertainty of future disruptions in the rest of the 2024. 

“Shippers are pulling shipment dates forward, resulting in a temporary demand for shipping capacity. This is reflected in higher throughput volumes, despite underlying consumer demand and factory orders being weak. 

For instance, consumer spending in the US increased by only 2% in the first quarter of 2024, below the advance estimate of 2.5% and the lowest increase in three quarters. Also, retail inventories excluding autos in the US increased by only 0.3% month-over-month in April 2024, following a 0.4% decline in March 2024, indicating only cautious restocking by retailers. Additionally, new orders for manufactured goods in April rose by $4.3 billion, a 0.7% increase to $588.2 billion, while shipments increased by $5.9 billion or 1% to $590.2 billion, signaling robust demand in the shipping and container logistics market.” Roeloffs explained.

But contrary to the weak underlying structural demand side, the year-to-date container TEUs comparison from 2024 to 2023 shows an average 18% increase in inbound TEUs at major US ports.

global trade container price

Table 1: Year-on-Year Growth of Inbound TEUs at Key US Ports (January-April)

Key US ports such as Los Angeles, Long Beach, and Port of Vancouver reported significant year-on-year growth rates, ranging from 28.1% to 22.37%. 

Short-term Price Bubble

As we monitor the market closely, it’s evident that the current spike in container prices is not sustainable in the long term, as it is not backed by strong underlying demand. Concerns over labor markets and high-interest rates imply that consumers are likely to reduce spending, which could lead to a decline in demand for goods and, consequently, a reduction in shipping volumes in the near term, unless the demand revival becomes stronger and the supply capacity soak up intensifies. 

Industry Sentiment remains volatile

Industry participants surveyed during May 2024 overwhelmingly indicated expectations of higher container price hikes. The Container Price Sentiment Index (xCPSI) exhibited significant volatility in its readings, reflecting the challenges arising from the Iran-Israel conflict, evolving geopolitical economic trade relationships, and persistent climatic changes causing droughts, compelling businesses to fortify their supply chains.

global trade container price

Chart 2: xCPSI, Container Price Sentiment Index as on 4 June 2024, by Container xChange

Chart 3: Monthly comparison of xCPSI survey results (Apri-May) 2024, by Container xChange

Market Outlook

“Given these factors, we expect that the elevated container prices we’ve seen in recent months may not be sustainable,” shared Christian Roeloffs, co-founder and CEO of Container xChange. “As the initial rush to restock inventories subsides and the real demand from consumers and businesses remains flat, we anticipate a stabilization or even a decline in container prices in the mid-term. The market is showing signs of volatility driven by short-term factors, rather than a sustained increase in demand.”

The underlying macroeconomic indicators suggest a more tempered outlook for the coming months. Consumer spending growth remains sluggish, and retail inventories are only modestly increasing. Additionally, the subdued consumer sentiment reflects ongoing concerns about labor markets and inflation, which are likely to dampen consumer demand further.

Visit Container xChange Market Intelligence Hub for similar analysis and reports.  

 

global trade rates freight import

Freight Rates Are Ballooning to Pandemic Highs 

Just as peak shipping season begins, a container capacity crunch could push rates to higher levels than previously seen with the Red Sea spike. Since January, major shipping and transportation firms such as DHL have been sounding the alarm over a pending container crunch. The Houthi attacks resulted in longer routes with more containers at sea and unavailable to be reloaded. Couple this with inclement weather impacting Chinese, Malaysian, and Singaporean ports, and the crunch is causing freight spot rates to jump as much as 30% over the past couple of weeks. 

Read also: Container Rates Surge Amid The Red Sea Crisis

The pandemic gave rise to some of the most severe capacity crunches in recent memory. Freight forwarders were pushed to premium rates just to acquire space guarantees, and the current environment is shaping up similarly. During March and April, many carriers were able to rely on idle vessels to offset some of the longer voyages and keep containers transiting at a reasonable pace. The result, however, is little, if any, excess capacity in the market. 

Earlier in the year, the previous high for a container was between $3,000 and $5,000. Rates at that time were nearly double those a year earlier. One of the factors driving inflation during the pandemic years was logistics price increases. The consumer ultimately pays when freight rates increase, and current events suggest a similar pattern moving forward. 

MSC had already announced rates of $8,000 to $10,000 for 40-foot containers en route to the US West Coast, while Wan Hai will be charging for “space protection.” Drewry, the maritime shipping research firm, noted a total of 17 canceled sailings between the last two weeks of May and the first two weeks of June on the Transpacific route, and logistics managers were rumored to be moving up peak season from July to June in an attempt to get ahead of any delays.   

Adding to the complexity, a potential strike or significant labor slowdown is on the horizon at the US East Coast and Gulf ports in the fall. A looming threat that could disrupt operations significantly, much depends on upcoming negotiations between the International Longshoremen’s Association, who represent the ports, and the US Maritime Alliance. 

global trade container

Container Rates Surge Amid The Red Sea Crisis

In response to the escalating Red Sea crisis, leading online container logistics platform Container xChange released a comprehensive report detailing the far-reaching effects on container trading and leasing rates worldwide. The report explores the intricate dynamics of the crisis, shedding light on the unprecedented surge in container prices and leasing rates, as well as the ripple effect on global trade routes.

Read also: Red Sea Global Trade Disruptions: How to Overcome the Chaos

1. IMPACT OF RED SEA ATTACKS ON CONTAINER PRICES

As container vessels take longer routes, capacity constraints contribute to a revival in container rates. The China-to-Europe trade lane has witnessed significant surges, with trading spot rates soaring in key Chinese ports. The disruptions are not confined to China; leasing rates bound for Hamburg, Germany, have doubled since Jan 1.

To provide context on the current state of average container prices in Shanghai, China, in comparison to the peak demand period during the COVID-19 pandemic (2021), we present a chart illustrating the price trends from 2020 to Jan. 29, 2024. The container prices skyrocketed to historic levels in 2021 due to the pent-up demand post COVID, reaching a peak of $6,171 in the last week of September 2021, and falling since then until December 2023 (keeping aside minor seasonal hikes). However, container prices have experienced a significant increase since the beginning of January 2024. 

Weekly China-Europe Trading spot rates continue to shoot up: Trading spot rates for 40-foot-high cube cargo-worthy containers have witnessed a significant surge in key Chinese ports. Noticeable week-on-week increases have been recorded in Xiamen (23%), Shekou (19%), Guangzhou (10%), Huangpu (8%), and Nansha (8%). These disruptions are not confined to China; leasing rates bound for Hamburg have doubled since Jan. 1.

“Since the beginning of the Houthi situation, the trading prices for 40-foot-high cube units in China significantly increased because there is expected tightness around equipment availability in Chinese main ports ahead of Chinese New Year because the loop around Africa soaks up capacity and delays the return of empty equipment to China,” commented Christian Roeloffs, cofounder and CEO of Container xChange.

“At present, there is still surplus in the market. However, the challenge lies in securing space on vessels, and the PUCs (pickup charges) are considerably high. The suppliers are hesitant to reposition their containers to locations with elevated storage fees, and if they do, they often seek to offset these costs by demanding higher PUC.”

A Container xChange customer from India added, “Storage charges in India are inexpensive. Consequently, some NVOCC [non-vessel operating common carriers] opt to utilize containers from other companies rather than moving their own.”

Container xChange’s research indicates a global impact on container trading prices, with the top 10 locations experiencing substantial month-on-month percentage increases. European ports like Le Havre, France, and Duisburg, Germany, witnessed significant decreases, while ports in North America showed mixed results. Meanwhile, Asian ports, including Shanghai, China, and Xiamen, China, saw an increase in average container prices, indicating adaptation to disruptions.

Shown above are the top 10 locations with biggest percentage increase in average monthly container prices across the world.

There are varying degrees of impact on container prices across different regions. Some regions experienced a decrease in prices, while others saw an increase. 

2. CONTAINER LEASING RATES CONTINUE TO RISE

Container leasing spot rates have mirrored the spikes observed in trading prices, especially in the China-to-Europe route. Rates have steadily increased, reaching notable highs. The expected continuation of disruptions indicates a prolonged period of challenges, requiring industries to adapt to structural imbalances in supply and demand.

“We’ve witnessed a continuous surge in leasing rates since around August-September 2023, starting at a low of approximately $200 for a one-way move from Ningbo or Shanghai to Hamburg, often referred to as pickup charges,” says Roeloffs. 

“This escalation is primarily driven by two key factors. Firstly, the widening price gap in trading prices has played a pivotal role, and secondly, there’s a notable equipment scarcity across China. As the price gap widens and equipment availability tightens, the spike has become more evident since the beginning of 2024. It’s clear that the attacks in the Red Sea are not merely a passing phenomenon; they have substantial implications on the routing of container vessels, causing delays in their return trips to China. We have witnessed this surge to top at $800 for a one-way move, marking a fourfold increase.”

The Container xChange co-founder and CEO continues, “We do expect that after Chinese New Year the situation will decelerate and ease up owing to the drop in demand, carriers will be able to reconfigure their network and adjust to the longer transit times around the cape of good hope and are supposed to have a structural supply demand imbalance with a significance supply overhang.” 

He concludes, “The situation is expected to persist for a longer than expected period of time and hence, we will probably have to live with this for a long time.”

Top trade routes with highest month-on-month rate hikes: In the period from Jan. 1-30, 2024, leasing rates for routes bound to Hamburg showed a substantial increase. For example, Qingdao to Hamburg rates surged from $260 on Jan. 1 to $1,060 by Jan. 30. Similarly, Shenzhen to Hamburg rates rose from $500 on Jan. 1 to $750 by Jan. 30. These figures highlight a significant upward trend in leasing rates during the specified timeframe, illustrating the impactful changes in the market.

Below is the list of the highest spikes noticed month on month from December 2023 to January 2024 across trade routes. The prices are the average leasing terms for SOCs (shipper owned containers) as observed on the Insights platform of Container xChange.

 European ports experience substantial increases: Routes connecting Shanghai to European ports, such as Le Havre, Budapest, and Munich, witnessed some of the highest percentage increases. Le Havre recorded an extraordinary surge of 323.08%. This indicates potential challenges in the European supply chain, possibly due to the longer alternative route and increased shipping costs.

Impact on trans-Pacific routes: Routes to the West Coast of the United States, including Oakland, Los Angeles, and Long Beach, all in California, experienced notable increases (ranging from 30.94% to 51.71%). The rise in leasing rates suggests that vessels rerouting around the Cape of Good Hope are facing higher costs, potentially due to increased travel distances and fuel consumption.

Significant impact on transatlantic routes: Routes connecting Shanghai to key North American cities like New York, New York, and Cleveland, Ohio, witnessed considerable percentage increases. This indicates that the disruption is affecting the traditional transatlantic trade routes, with potential repercussions for industries relying on timely deliveries between Asia and North America.

Mixed impact on Asian routes: While routes to Chennai, India, experienced a substantial increase (73.33%), routes to Minsk, Belarus, showed a comparatively lower percentage rise (19.17%). This suggests variations in how disruptions affect different regions, possibly influenced by the nature of trade and supply chain dynamics.

3. INDUSTRIES IMPACTED BY RED SEA TURMOIL

The longer disruptions at the Red Sea trade route pose a significant threat to various industries, including automobiles, electronics, chemicals, consumer goods, machinery, and pharmaceuticals. Delays in the supply chain could lead to production interruptions, impacting global value chains.

“Effectively navigating this critical period requires enhanced predictive analysis, meticulous demand forecasting, and increased collaboration within the industry,” says Roeloffs. “By employing advanced planning techniques and maintaining agility in response to evolving situations, the manufacturing sector can not only overcome immediate challenges but also strategically position itself for long-term success. Adapting to the new normal will involve holding increased inventory, accounting for extended transit times, and acknowledging higher container rates as integral components of the evolving landscape.”

The impact extends beyond individual industries to the broader economy, emphasizing the vulnerability of just-in-time manufacturing processes to disruptions. Businesses across sectors will need to closely monitor and adapt to evolving circumstances to ensure the continued flow of goods through alternative routes if necessary.

A remarkably positive outlook on container price development: In January, the Container Price Sentiment Index (xCPSI), a proprietary container price sentiment tool by Container xChange, consistently maintained historically elevated levels, reflecting a widespread belief that container prices would continue to soar due to the ongoing Red Sea crisis. The industry anticipates sustained high prices, highlighting the profound impact of the crisis on global trade.

The industry’s expectation for container prices to remain exceptionally high in the foreseeable future urges businesses to stay agile and vigilant in their planning amidst evolving global trade dynamics.

The Container Price Sentiment Index (xCPSI) serves as a valuable metric for assessing the prevailing market sentiments among supply chain professionals on the anticipated trajectory of container prices in the upcoming weeks.

Container xChange serves as a global online platform facilitating container leasing and trading, connecting container users with owners. The platform streamlines the process of finding and exchanging containers, optimizing fleet management, and fostering collaboration across the shipping industry. Currently, 1,500+ vetted container logistics companies trust xChange with their business.

 

Hapag-Lloyd global trade

Hapag-Lloyd Leads the Industry with Fleet-Wide Real-Time Container Tracking

Hapag-Lloyd has taken a pioneering step in the container shipping industry by introducing real-time container tracking across the majority of its extensive fleet, encompassing nearly 3 million containers. With its innovative “Live Position” feature, customers can now monitor their shipments seamlessly from origin to destination. The company has made significant progress, equipping over two-thirds of its dry container fleet with tracking devices, with plans for complete coverage by summer.

Dr. Maximilian Rothkopf, Hapag-Lloyd’s COO, emphasized the transformative impact of real-time tracking, enabling swift decision-making and risk management for customers while enhancing fleet management efficiency. This milestone aligns with Hapag-Lloyd’s commitment declared in April 2022 to outfit all standard shipping containers with real-time monitoring, with installations commencing shortly thereafter.

Henrik Schilling, Head of Global Commercial Development, highlighted the company’s dedication to addressing customer concerns and enhancing operational capabilities. The Company aims to integrate tracking data seamlessly into customers’ systems via API and introduce Estimated Time of Arrival (ETA) Prediction as part of its ongoing product development.

This initiative builds upon Hapag-Lloyd’s previous success in real-time monitoring for its reefer container fleet and underscores its commitment to innovation and customer satisfaction. Collaborating with TradeTech company Nexxiot AG and leveraging devices from ORBCOMM, Hapag-Lloyd continues to lead the industry in providing cutting-edge solutions for enhanced supply chain visibility and efficiency.

transportation supply chain odex portal mcleod

Supply Chain Professionals Embrace Tech, Anticipate Positive Growth, and Strategize for Overcapacity Challenges

Container xChange, the world’s leading online container logistics platform, recently conducted a comprehensive survey with 1200 supply chain professionals globally. 

The collective results reveal an optimistic outlook for 2024, as respondents foresee positive growth in the global container shipping industry in 2024 as compared to 2023. 74% of respondents expressing optimism about the industry’s growth, 20% expecting stability, and only 6% anticipating a decline. Most participants anticipate an increase in container prices compared to 2023 levels. 

“As we navigate the evolving landscape of the global container shipping industry, the positive shift in sentiment revealed by our annual survey is a promising indicator for 2024. Supply chain professionals are strategically rethinking trade routes and embracing technology to foster resilience and innovation. While we are optimistic about the industry’s growth, we remain vigilant, recognizing potential disruptions in 2024, such as geopolitical tensions. explained Christian Roeloffs, cofounder and CEO of Container xChange. 

Another indication of improving market sentiment witnessed as part of the annual survey is that 53% of respondents expect container prices to increase in the coming year as compared to the year 2023, while 26% expect these prices to remain stable at these rates, and only 21% pessimistic about the prices to decline further. 

supply chain

Chart 1: Survey with 1200 supply chain professionals about how they expect container prices to develop in the year 2024

The Container Price Sentiment Index (xCPSI) which is an industry sentiment barometer from Container xChange, mirrors this positive sentiment as it has been showing consistently higher values in the H2 of this year (starting July) as compared to the H1, showcasing an improving sentiment for container prices in the second half of the year 2023.

Particularly in the Q4’23, the sentiment has been consistently higher as compared to the rest of the three quarters in 2023.

supply chain

Chart 2: Container xChange Container Price Sentiment Index (xCPSI), sentiment consistently improves significantly in the H2’23

These findings were released as the company published results of its annual xChange industry speak survey 2023-24. The survey was released to 1200 container logistics players globally including shipping lines, container traders, freight forwarding companies, NVOCCs, shippers and procurement companies. The objective of the survey was to study the industry sentiment, key learnings from the year 2023 and outlook for the year 2024 from the players.

Majority of respondents said that they are planning to invest in technology for forecasting and planning (30%) followed by real time visibility and tracking (24%), collaboration and connectivity (27%) and lastly, process automation (18%). 

Chart 3: Container xChange Year-end survey 2023-24 – Key Supply Chain Tech Investments in 2024

“Our survey underscores a significant emphasis on technology adoption among supply chain professionals, with forecasting and planning as top of mind for our customers. The industry’s recognition of the pivotal role played by real-time visibility, collaboration, and process automation reflects a collective commitment to efficiency and strategic planning.” said Roeloffs.

When asked where they plan to prioritize the technology investments in 2024, the share of each amongst the four were distributed almost evenly, while forecasting and planning remaining top of mind for these professionals who responded. 

When asked about how the oversupply of containers would be managed in 2024, most respondents believe that exploring to new markets and trade routes will be a key strategy used by carriers to tackle the overcapacity conundrum in 2024. Other popular tactics will be scrapping old vessels and slow steaming strategies. 

Chart 4: Container xChange Year-end survey 2023-24 – How will the carriers tackle the oversupply in the market in 2024