February Decrease Keeps 2023 U.S. Container Imports on 2019 Path

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February Decrease Keeps 2023 U.S. Container Imports on 2019 Path

March 13th, 2023 Chris Jones, EVP of industry and services at Descartes Leave a comment

Descartes Systems Group, the global leader in uniting logistics-intensive businesses in commerce, released its March Global Shipping Report for logistics and supply chain professionals. The report shows February 2023 U.S. container imports decreased significantly from January 2023 but remained aligned with pre-pandemic 2019 volumes. Despite the reduction, port transit delays increased for the top West, East and Gulf Coast ports. Chinese imports followed the downward trend along with the rest of the top countries of origin. COVID continues to be a factor from ports of origin and the West Coast labor situation has still not been sorted out. The February update of the logistics metrics Descartes is tracking shows some consistency with pre-pandemic import volume seasonality but continues to point to challenging global supply chain performance in 2023.

February 2023 U.S. container import volumes decreased 16.2% from January 2023 to 1,734,272 TEUs (see Figure 1). Versus February 2022, TEU volume was down 25.0%, but only 0.3% lower than pre-pandemic February 2019. Two points to consider with the February numbers: 1) February has 28 days versus 31 for January and 2) With the Chinese Lunar New Year holiday occurring in January 2023, its impact on container import volumes would be seen in late February and early March 2023.

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

Source: Descartes Datamyne™

“Examining imports from January and February in the previous six years, February 2023 volumes would have been expected to be significantly lower than January 2023 (see Figure 2),” said Chris Jones, EVP Industry at Descartes. “Declining container import volumes but rising port transit times demonstrate that, while 2023 volumes resemble 2019, global supply chain performance could remain uneven in 2023.”

Figure 2: January to February U.S. Container Import Volume Comparison

Source: Descartes Datamyne™

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

About Descartes

Descartes (Nasdaq:DSGX) (TSX:DSG) is the global leader in providing on-demand, software-as-a-service solutions focused on improving the productivity, performance and security of logistics-intensive businesses. Customers use our modular, software-as-a-service solutions to route, schedule, track and measure delivery resources; plan, allocate and execute shipments; rate, audit and pay transportation invoices; access global trade data; file customs and security documents for imports and exports; and complete numerous other logistics processes by participating in the world’s largest, collaborative multimodal logistics community. Our headquarters are in Waterloo, Ontario, Canada and we have offices and partners around the world. Learn more at www.descartes.com, and connect with us on LinkedIn and Twitter.

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Depots Overwhelmed; Supply Chain Professionals Optimistic for a Rebound in Container Prices

March 7th, 2023 Container xChange Leave a comment

Container xChange, an online container logistics company, published its March container market forecaster today. While most industry participants foresee container prices reviving in the coming months, we see the Container Price Sentiment Index (xCPSI) recording a positive value by the beginning of March 2023.

Historically, around 2700+ industry professionals have participated in the sentiment analysis surveys since February where Container xChange asked for their expectations on container price development in the coming times.

These repeated surveys form a crucial element of the Container price sentiment index (xCPSI) which indicates how shipping professionals worldwide are viewing container prices to develop in the coming times. The positive trend that we see since the last three recordings indicates that the industry expects container prices to improve soon, thereby reviving confidence.

Excess containers causing depots to run on 90% utilization

“We learn from many customers of Container xChange that the demand for containers is still there, just that the supply is overshooting the demand. Due to this, we see ripple impacts like for example, depots working on max capacity (Depots in China for instance working on 90% utilization) and therefore, not being able to accept new clients. This is a global phenomenon now. And that is a struggle for the NVOCCs and shipping lines who want to open new markets.” inferred Christian Roeloffs, cofounder and CEO of Container xChange.

Container xChange provides a marketplace, an operating infrastructure, and a layer of services like payments to container logistics companies globally.

Oversupply of containers has caused depots to run on almost 90% utilization in countries like China which makes it difficult for depots to move the containers around and eventually makes depots less efficient. To put context, depots earn on handlings (gate movements) and not so much on storage. So, this development is also more painful for them in terms of contribution to operational inefficiencies than a contribution to revenue.

Commenting on the state of depots currently, Agnieszka Polejewska, Container Depot Department Coordinator, Langowski Logistics company based in Poland shares with Container xChange, “For inland containers, we do not see many containers on the yards. The production of new containers and their expanse on the ports in Europe and the USA can be overwhelming, as there are still a lot of old containers. But the production was, is and will be still working, as old, heavily used containers must be replaced. We must wait it out till the end of the Q1 of 2023 to see how this situation is developing because of so many disruptions in our industry.”

Shipping Lines and Leasing Companies holding inventory

We have also observed that the leasing companies and shipping lines are holding their containers longer than they would normally. They are deploying a wait-and-watch strategy hoping that prices will stabilize. Sell-offs are also not happening yet because the leasing and shipping companies have a free storage agreement with the depots. So, they don’t feel the storage fee pain and hence, wait and see until the prices stabilize.

We do think that container selloffs will intensify into the Q2 or the second part of this year because depots will run out of space, prices will continue to erode, and shipping lines and leasing companies will need to sell off some of that stock so the volume of second containers and trading will increase in future and will further drive down the cost.

Friendshoring is happening

As geopolitical risks intensify, global economies are working towards diversifying their production, manufacturing, and container sourcing. The forecaster affirms that according to industry research, friend shoring is happening.

On the topic of diversification of trade lanes, Christian Roeloffs, cofounder and CEO, of Container xChange comments, “The process of diversification has already started. Since this is a long-drawn process, we are yet to see visible signs of this in the trade patterns. But we see an uptick in intra-Asia trade. In the future, the larger trades will suffer a demand decrease so capacity needs to be adjusted towards regions with more sticky demand and more stable rate levels. Supply chains will need to be more resilient in the coming years. These relocation strategies will effectively reduce reliance on one production and supply chain hub to a more diverse, smaller trading pattern.”

“For logistics stakeholders, there are more fragmented value chains to be dealt with, more growth to be discovered worldwide, and ultimately, we expect a broader base for business. This could be unleashed by the right set of data and insights to create a better ecosystem for companies.”

For more on container logistics industry developments, download the full report ‘Where are all the containers’ from here

About Where are all the containers (Container xChange’s monthly container logistics report)

Container xChange sits on a very large set of data on container trading and leasing. This allows us to have visibility into container movements, container prices, leasing rates, and container availability. The report helps our industry participants to access insights which can help in more informed business decision-making for container logistics companies worldwide.

With this report, we give a monthly glimpse of the data-based trends that impact container logistics companies, shipping, and related industries. We also bring forward valuable insights for users and suppliers of shipping containers as well as update them about the average prices of the 20ft, 40ft and 40 ft HC containers, pick-up charges for one-way moves, and the Container Availability Index (CAx) of key ports. Our analysis is based on global news research, extensive primary and secondary market and industry research. Our proprietary data tool for visibility- ‘Insights’ helps us arrive at faster data discovery and trends arrival. For more on insights, click here

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Wheeled Container Freight Storage Presents Major Problems for Shippers

February 17th, 2023 Tim Jay Leave a comment

Shippers need to prepare for the additional stress on chassis pools and an excessive amount of box detention

ITS Logistics, today released the February forecast for the ITS Logistics US Port/Rail Ramp Freight Index. This month the index forecasts that there will be significant complications with freight being stored on wheeled containers in the US, as well as limited ocean chassis equipment.

These charges are less than ideal given the weaker consumer demand and pressure to lower the cost of goods sold in an attempt to process the historically high inventory levels. It is expected to ripple through earnings for Shippers creating further challenges in the new year. Rail service disruptions have also impacted export schedule reliability, resulting in a shortage of containers moving from ports to inland rail yards.The news comes just as the Federal Maritime Commission (FMC) prepares to enforce the Ocean Shipping Reform Act in the new year by conducting further investigations into carriers. Currently, the FMC is working through more than 200 complaints against carriers, as they are being denied cargo space and facing rising detention and demurrage fees. The agency saw almost $2 billion in detention and demurrage complaints in 2022, and carriers have already refunded $700,000.

ITS Logistics offers a full suite of network transportation solutions across North America as well as omnichannel distribution and fulfillment services to 95% of the U.S. population within a two-day timeframe. These services include drayage and intermodal in 22 coastal ports and 30 rail ramps, a full suite of asset and asset-lite transportation solutions, omnichannel distribution and fulfillment, and outbound small parcel.

The ITS Logistics US Port/Rail Ramp Freight Index forecasts port container and dray operations for the Pacific, Atlantic, and Gulf regions. Ocean and domestic container rail ramp operations are also highlighted in the index for both the West Inland and East Inland regions. Visit here for a full comprehensive copy of the index with expected forecasts for the US port and rail ramps.

About ITS Logistics

ITS Logistics is a premier Third-Party Logistics company that provides creative supply chain solutions with an asset-lite transportation division ranked #23 in North America, the #11 drayage and intermodal provider, a top-tier asset-based dedicated fleet ranked #39, and innovative omnichannel distribution and fulfillment services. With the highest level of service, unmatched industry experience and work ethic, and a laser focus on innovation and technology–our purpose is to improve the quality of life by delivering excellence in everything we do.

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Increase in U.S. Container Import Volumes Makes 2023 Look More Like 2019

February 15th, 2023 Tim Jay Leave a comment

Descartes Systems Group, the global leader in uniting logistics-intensive businesses in commerce, released its February Global Shipping Report for logistics and supply chain professionals. The report shows that January U.S. container import volumes increased from December to more tightly align with January 2019 levels. Port delays continue to decrease for top East and Gulf Coast ports but not for top West Coast ports. Key indicators during this period point to stronger than anticipated economic activity. This could impact future container import volumes but, combined with COVID, the Russia/Ukraine conflict and the West Coast labor situation, continue to highlight potential disruptions that could make for challenging global supply chain performance in 2023.

January 2023 U.S. container import volumes increased 7.2% from December 2022 to 2,068,493 TEUs (see Figure 1). Versus January 2022, TEU volume was down 16.1%, but only 0.3% lower than pre-pandemic January 2019. While the Chinese Lunar New Year holiday occurred in January, its impact on container import volumes won’t be felt until late February and early March 2023.

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

“Comparing January 2023 import volume to growth of the previous five years, the 7.2% increase can be considered significant (see Figure 2) and Chinese imports rebounded with even stronger growth,” said Chris Jones, EVP Industry & Services at Descartes. “The January U.S. container import data shows some stability, but a number of issues continue to point to challenging global supply chain performance in 2023.”

Figure 2: December to January U.S. Container Import Volume Comparison

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

About Descartes

Descartes is the global leader in providing on-demand, software-as-a-service solutions focused on improving the productivity, performance and security of logistics-intensive businesses. Customers use our modular, software-as-a-service solutions to route, schedule, track and measure delivery resources; plan, allocate and execute shipments; rate, audit and pay transportation invoices; access global trade data; file customs and security documents for imports and exports; and complete numerous other logistics processes by participating in the world’s largest, collaborative multimodal logistics community. Our headquarters are in Waterloo, Ontario, Canada and we have offices and partners around the world.

Archives, Global Logistics, Global Trade Daily, Uncategorized

Faster Inventory Replenishment Cycles Expected in 2023; Depot Space to Remain Tight and Operational Costs to Remain Elevated

December 30th, 2022 Container xChange Leave a comment

The holiday season, now at its peak, is going to trigger an early burn-out of inventories in the US, which resultantly will kickstart the inventory replenishment cycles a bit sooner than the supply chain and shipping industry predicted earlier this year. This would cause an increase in demand the export hubs as the US starts to work on balancing its order-to-inventory ratio, as discussed in a recent webinar hosted by Container xChange, the leading online container logistics platform for container trading and leasing globally.

The webinar shed light on some of the pertinent challenges faced by the container logistics industry worldwide and discussed some of the market trends likely to appear in the industry.

Global trade is undergoing an opportune shift in supply chain reliance on China to newer emerging SE markets as the country tightens its zero covid policy and struggles with increasing labor costs amidst other market disruptions. Furthermore, China has grown out of the low-cost countries (LCC) label, which has made way for other southeast Asian countries like India, Singapore, Vietnam, and Malaysia to mark their presence into multinational companies’ long-term regional presence imperative.

Predicting how the trade volume shift might look like in 2023, Mr. Eric Johnson, Director at S&P Global and Senior Technology Editor at JOC.com said, “There is an evident drop in trade between China and the US and the UK, and one of the major trends that have caught the attention of the supply chain and shipping industry is that imports from China to the US and UK have gone down. However, import volume into the US as a whole from all regions hasn’t gone down at the same rate as from China specifically which strongly corroborates the trade shifting elsewhere.”

Companies globally are focusing on creating regional alternatives to curb supply chain disruptions cropping up due to high labor costs, fresh lockdowns in the country and protests in the country.

With the dramatic fall in consumer demand, and with more containers available, the spot rates on transpacific routes between some countries in East Asia and the US have dropped drastically as well.

The spot rate of a 40 ft container in the China-West Coast route fell by 20% to $2,361 in October. The typical premium rate a year back was $20,000. Across the Atlantic, shippers in the US have witnessed a 20% dip in ocean freight orders, and ocean carriers have cancelled half of their sailings to make sure that their vessel’s capacity matches the demand.

One-way pickup charges for standard containers from China to North America are declining month on month since May 2022 from $1773 to $344 in October. (One-fifth of what it was in May)

One-way pickup charges from China to Europe declined from $2845 in January 2022, to $1726 in May 2022 and further to $910 in October

One-way pickup charges declined by 80% from $1773 in May to $344 in October over the past 6 months at the China-North America stretch, and a 47% decline on the China-to-Europe stretch

China continues to see a fall in freight rates

According to Container xChange platform data, the average container prices and one-way leasing rates in October 2022 on Asia to the US East Coast and the West Coast were respectively 63% and 85% lower than the rates in October 2021. However, while the rates have dropped dramatically in 2022, if we compare them with the rates in October 2019 instead, the drop is not as surprising.

“The supply chain is already in distress with a surplus of containers, maxed out depot space and an increase in blank sailings. The Zero covid strategy and the geopolitical and trade risks in China will further contribute to the drop in demand for containers in China.” said Christian Roeloffs, cofounder and CEO, of Container xChange.

However, it also means that the demand will slowly stabilize and get closer to the level at which it was before the pandemic started. We also expect the capacity re-adjustments to continue. Especially in the Trans-Pacific Lane, the demand will continue to decline. In fact, by November end, West Coast spot rates might even drop below $2,000.” Christian added.

Container xChange’s data shows that not just has the price of the containers decreased but there also is a drastic decline in the pickup charges. The average one-way pickup (PU) rates for 40 ft HC boxes from China to the US have seen a steep decline since June 2022 from $2,109 in May to a surprising $606 in September.

CAx (Container availability Index) * values are much higher than pre-pandemic – meaning that the inbound containers are significantly higher at the Chinese ports than the imported boxes this year as compared to 2019 (pre-pandemic) and since then. This indicates that there are not as many containers leaving the ports from China which is now obvious and evident considering the uncertainties looming onto the China shipping business.

Countries and businesses show candor towards minimizing dependence on linear supply chains

“We will continue to see efforts towards diversification of supply chain sourcing and manufacturing out of China. This is a long-term view, and it will need vision and strategy from companies looking for a more resilient supply chain. We will witness increased container volumes intra-Asia and more countries will emerge as potential alternatives like Vietnam, India and more. In such an environment where there will be tighter margins for freight forwarders and traders, the cost is going to be everything. Leaders will look for ways to efficiency and business sustenance.”

Comparing the container prices in the Southeast Asian countries with that of China, the container prices are considerably lower in Indonesia, Thailand, Malaysia, Singapore, Vietnam and India than that China which corroborates well with the SE countries being opted as China plus one alternative.

Container xChange Platform Data

The concepts of “minimization of logistics risks” and “diversification of supply chain” are not new. Countries and businesses are working harder than ever to eliminate their supply chains’ excessive reliance on just one market. As part of a China plus one strategy, businesses are currently assessing and launching projects to test the waters by entering into fresh countries to meet their supply chain demands.

The speed of this diversification is actually closely correlated with the additional disruptions we will observe in China as a result of numerous variables, including the Zero COVID plan, additional production shutdowns, and escalating geopolitical tensions. If they happen more quickly, diversification will follow suit.

About Container xChange

Container xChange is a technology company that offers a container trading and leasing platform, payment infrastructure and efficient operating systems to container logistic companies worldwide. Covering the entire transaction process of shipping containers starting with finding new partners to tracking containers and managing payments, xChange makes using 3rd party equipment as easy as booking a hotel. We are on a mission to simplify the logistics of global trade.

Being one of the top ten logistics tech companies globally, xChange is fundamentally transforming thousands of processes involved in moving containers globally. xChange is trusted by more than 1000 container logistics companies including Kuehne+Nagel, Seaco or Sarjak that use our neutral online platform to remove friction and create economic opportunity.

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Container xChange Opens the Real-Time Data Door to Container Trading and Leasing Price Data with its New Solution

December 27th, 2022 Container xChange Leave a comment

In a bid to bring real-time container data accessibility, Container xChange, an online container logistics platform, has launched “xChange Insights”, a first-of-its-kind data-based solution for container traders, freight forwarders, shippers, and NVOCCs worldwide. This recent addition to the company’s product suite brings container market transparency by providing global container intelligence to support container logistics companies make smart trading and leasing decisions.

To understand the market pain points better, Container xChange polled over 250 container traders, freight forwarders, and NVOCCs and found that more than half (57%) of those surveyed spent over two hours finding real-time data on container prices and leasing rates. The poll also found that 44% of the shipping and container trading companies research and then analyse the procured data daily. This increases the manual workload on the professionals in the industry. Insights will solve this problem by giving access to real-time data and automating the process.

“Real-time price and leasing rates analysis is a challenge for many container logistics players due to the market’s slow adoption of technology. With technology penetrating deeper into the supply chain processes, it is time that we use big data for better decision-making. Most freight forwarders and container traders rely on their own experience or advice coming from established partnerships when judging business opportunities or exploring a new market. We simplify the access to data so industry participants can complement experience and offline knowledge with the latest facts when making decisions.”, said Dr. Johannes Schlingmeier, co-founder and CEO of Container xChange.

xChange Insights enables logistics companies to see and compare current container prices and SOC leasing rates in 130 locations around the globe, learn about price development for up to 2 years and make data-informed decisions. For example, whether it’s a good time to buy, sell or lease containers and what are the most lucrative cities for trading and leasing deals. The platform also highlights the latest trends, and relevant news, and provides guidance on main markets.

“’To address the container logistics market transparency issue and provide objective market data, we collect and analyse data from various sources: Container xChange marketplaces, container sellers and shipping lines. This information is then shared with our customers in an aggregated and convenient manner so that everyone can better understand the container pricing volatility and dependencies and derive better conclusions. We also plan to integrate even more data types and sources to further support our clients in developing their businesses.” adds Dr. Schlingmeier.

Welcor Containers, a global container trading company based in Uruguay, South America was able to create market opportunities using xChange Insights for its business. Talking about this, Bruno Kent, Head of Logistics, Welcor Containers said, “xChange Insights help us to enter the European trading market with confidence. We use Insights every day to check container prices and supply availability across Europe!”

About Container xChange 

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Container Shipping to Witness Rate War in 2023

December 12th, 2022 Tim Jay Leave a comment

The year 2022 was all about tight capacity and exceptionally high container rates. Towards the latter half of the year, the prices started to plummet and continue to crash as we transition into the new year, according to the market forecaster issued today by Container xChange, the online container logistics platform.

There is significant market volatility that continues to disrupt the container shipping industry. With a significant oversupply of containers and a further influx of more TEUs in 2023, Shipping lines continue to reduce vessel capacity and suspend services by considerable blank sailings. In a recent advisory, Maersk indicates that it will continue to ‘make capacity adjustments on services from Asia to North America, Europe and the Mediterranean to better align with demand fluctuations.’ We observe a similar trend echoing in the industry.

“In 2023, there is a high possibility of an all-out price war. It doesn’t seem that the capacity restrictions that we have seen in the past two years are due to return, so we’ll just have ample capacity both on the vessel as well as on the container side. With the competitive dynamics in the container shipping and liner industry, I don’t expect especially the big players to hold back, and we do expect prices to come down to almost variable costs. We also foresee market consolidation.” commented Christian Roeloffs, Cofounder and CEO, of Container xChange, an online platform for container logistics.

This is starting with initially carriers defaulting and reducing their fleet. Recently, there was news about CHINA United Lines, an emerging carrier on transpacific and Asia-Europe services, being at risk of defaulting on a charter party involving more than 10 containerships.

“Into the year 2023, freight forwarders will be able to go window shopping quite a lot, and there’s going to be a lot of room for negotiation, especially in the early parts of the year. Contract rates will follow suit as spot rates fall significantly.” Roeloffs added.

“In such an environment where there will be tighter margins for freight forwarders and traders, the cost is going to be everything. Leaders will look for ways to efficiency and business sustenance. Technology offers a great opportunity for leaders to minimize risk with data visibility and transparency while also maintaining a healthy partner portfolio that helps greatly in testing times.”

“Tight grip on costs becomes paramount for freight forwarders into the year 2023. While on one hand there will be a great deal of negotiation with shipping lines and on the other hand, operational cost optimization will be crucial for the forwarders. There will be careful monitoring of the demurrage and detention charges for instance, insurance charges, claims etc. As capacity on the ocean side becomes more abundant, there is a valid business case for using SOCs which not just offer flexibility but greater control to the forwarders.” said Dr. Johannes Schlingmeier, cofounder and CEO, Container xChange.

To think of the situation from a more macro-lens, it seems that what we experienced in the past three years is a natural reaction of market forces of demand and supply resulting from the disruptions like covid-19 and subsequent lockdowns, the war in Ukraine by Russia, geopolitical risks and many more. Container prices skyrocketed soon after the pandemic hit because there were not enough containers to fulfill the rising demand and that’s when retailers and importers started to stock much more in advance to avoid the historic port congestions. The pre-peak season in 2022 saw record container throughput in import-heavy ports. Now that the stocks have been filled, the demand is plummeting. Inflation and the energy crisis are leading up to cautious spending which will have its own impact on the container industry. The shipping industry will survive this, and we will again start to see normal activity levels in the future, though not immediate future. The good part is, that the worst is behind us.

Figure 1: Average Container prices in China

There is a steep freefall in average prices for containers in Central Asia, the Middle East and ISC.

Figure 2: Average container prices in Central Asia

Figure 3: Average container prices in the Middle East and ISC

About Container xChange

Container logistics is plagued by a lack of transparency and mistrust. And contrary to the standardized container itself, most processes in container logistics have not been standardized nor innovated — and are still frustratingly complex, manual and error-prone. Combined with thin margins, this makes it difficult for logistics businesses to survive and thrive.

Container xChange is the leading online platform for container logistics that brings together all relevant companies to book and manage shipping containers as well as to settle all related invoices and payments.

The neutral online platform…

connects supply and demand of shipping containers and transportation services with full transparency on availability, pricing and reputation,
simplifies operations from pickup to drop-off of containers,
and auto-settles payments in real-time for all your transactions to reduce invoice reconciliation efforts and payment costs.

Currently, more than 1500+ vetted container logistics companies trust xChange with their business—and enjoy transparency through performance ratings and partner reviews. Unlike limited personal networks, excel sheets and emails you rely on, Container xChange gives its users countless options to book and manage containers, move faster with confidence and increase profit margins.

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Depots to Face the Brunt of Container Surplus well into 2023

November 24th, 2022 Container xChange Leave a comment

The industry is witnessing a major slump in the order-to-inventory ratio with high inventories but slower demands. According to the November edition of the Container xChange Forecaster, this leaves a rippling effect across different stages of container logistics.

One of the glaring issues which will impact container repositioning and container movement well into the year 2023 is insufficient depot space.

“There is just not enough depot space to accommodate all the containers. With the further release of container inventory into the market (e.g., from the disposal of leasing fleets), there will be added pressure on depots in the coming months. This will be a key challenge for some and a competitive advantage for others in the business, especially in China because of the empty container repositioning there”, inferred Christian Roeloffs, cofounder and CEO, of Container xChange, the online container logistics platform.

Talking about the impact of hinterland disruptions and de-fleeting of shipping lines in the coming times, Andrea Monti, CEO at Sogese who also owns container depots in different locations in Europe commented during the Digital Container Summit in October, “Whatever was coming in and out of, for instance, our Milan depot is quite stuck. And the container volume at the depots is increasing to an extent that we are returning some requests for depot service agreements. We are in a situation where we are not able to accept new clients for some locations.”

This peak season, which has technically not happened this year, retailers and companies are more cautious in their stock management strategy as they adjust to the shorter cargo delivery cycle.

“There is enough inventory with retailers. Once these inventories exhaust in North America and Europe, companies will order again, and demand for shipping capacity will pop back up. This won’t go back to max pandemic levels but certainly be back to the long-term average upward trend. What has happened now is that the cargo is “on time” again and hence you’ll see a slowdown in new ordering as companies adjust to this more efficient turnaround times in ocean freight delivery.”

“For container owners, this could potentially mean a rise in container storage fee by depots as more containers pile up to disincentivize longer staying containers at the depots.” said Dr. Johannes Schlingmeier, cofounder and CEO, Container xChange

The latest monthly logistics report by Container xChange ‘Where are all the containers’ echoed interesting testimonies on the market situation.

The average container prices (for trading) and one-way pickup charges (for leasing) for standard containers declined to their lowest in two years in China. These were at $3711 in October in China, declining further (so far) in November.

One-way pickup charges for standard containers from China to North America are declining month on month since May 2022 from $1773, to $344 in October. (One-fifth of what it was in May)

One-way pickup charges from China to Europe declined from $2845 in January 2022 to $1726 in May 2022 and further to $910 in October

One-way pickup charges declined by 80% from $1773 in May to $344 in October over the past 6 months at the China-North America stretch, and a 47% decline on the China-to-Europe stretch

“The declining rates and container prices indicate a weakening demand and surplus of containers. The wider this gap, the lower the container rates and prices. The logistic companies have already moved onto the planning for Chinese New Year because of the weak peak season this year”, further added Roeloffs.

Average container prices fell by 9% from $3609 in September to $3286 in October in the US

Average prices declining in Europe

Average prices freefall in Asia

Rising imbalances in supply and demand for containers, rising empty container repositioning to Asia and tighter depot space will be topics for attention well into the year 2023.

A majority of those polled by Container xChange in the month of October echo that the freefall of container prices is NOT an indicator of global economic normalization well into 2023. Clearly, the industry is not upbeat about the supply chain getting back on track.

About Container xChange

Container logistics is plagued by intransparency and mistrust. And contrary to the standardized container itself, most processes in container logistics have not been standardized nor innovated — and are still frustratingly complex, manual and error-prone. Combined with thin margins, this makes it difficult for logistics businesses to survive and thrive.

The neutral online platform…

connects supply and demand of shipping containers and transportation services with full transparency on availability, pricing and reputation,
simplifies operations from pickup to drop-off of containers,
and auto-settles payments in real-time for all your transactions to reduce invoice reconciliation efforts and payment costs.

Archives, Global Logistics, Global Trade Daily

Market Volatility Causing the Classic ‘boom and bust cycle’ in the Container Shipping Industry

October 21st, 2022 Container xChange Leave a comment

The fall in China’s exports in September, the global economic downturn and the innumerable repercussions of the endless impacts of the war, the lockdowns in China and the port strikes have been the highlight of the monthly container logistics report published this month by Container xChange, an online platform for container logistic companies to book and manage containers while also efficiently managing payment and related services.

“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 since the outbreak of the pandemic. It is like the classic boom and bust cycle.” said Christian Roeloffs, cofounder and CEO, Container xChange.

“There is a relatively low orders-to-inventory ratio. The retailers and the bigger buyers or shippers are more cautious about the outlook on demand and are ordering less. 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.” Roeloffs added.

Another key trend is the early signs of companies trying to diversify their sourcing strategy with Vietnam emerging as one of the key sourcing hubs.

Based on 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. For container users, it’s perhaps the right time to leverage these rates as the country gears up in enhancing its export growth.

All in all, on Container xChange trading platforms, the prices for cargo-worthy 40 DC boxes in the ports of China have seen a steady decline in 2022 – almost becoming half of what they were at the beginning of the year. And though the ports of India and Vietnam too have seen similar decline, the trading prices seem to have stabilized 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.

Europe faces historically the most difficult time in a long time

The declining consumer confidence reflects in the sliding container prices and rates in Europe.

The European market is finding itself flooded with 40 ft HC containers. As a result, the region is experiencing a fall in the prices of these boxes. As of September 21, 2022, the general average 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.

Logjams clear in the US

As shippers started favoring the US East Coast ports for importing cargo to the US, the PU charges from China to these ports fell dramatically. 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.

The PU charges from China to the ports on US West Coast were running high in the beginning of the year, nearing $3000. As the logjams in these ports began clearing up, the PU charges too started falling slowly. 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 drop was from $1,514 to $1,156 for the port of Oakland.

For more indepth analysis and data, please download the full report from here – https://www.container-xchange.com/reports/monthly-container-logistics-update/

About Container xChange

Container xChange is a technology company that offers a container trading and leasing platform, payment infrastructure (for transparent and easier payment handling) and efficient operating systems to manage the end-to-end container movement across the globe for container logistic companies worldwide. Covering the entire transaction process of shipping containers starting with finding new partners to track containers and managing payments, xChange makes using 3rd party equipment as easy as booking a hotel. We are on a mission to simplify the logistics of global trade.

Being one of the top ten logistics tech companies globally, xChange is fundamentally transforming thousands of processes involved in moving containers globally. xChange is trusted by thousands of container logistic companies such as Kuehne+Nagel, Seaco or Sarjak that use xChange every day to improve operational effectiveness and productivity.

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Digital Container Summit (DCS’22) brings the Container Logistics Industry Together this October

October 1st, 2022 Container xChange Leave a comment

Container xChange, an online container logistics platform for container logistics companies, is going to hold the 4th edition of its Ultimate Container Networking Event, the Digital Container Summit 2022 on 04-05 October 2022. This event is aimed at bringing as many players from the container industry as possible under one roof and providing a platform for container logistic players across the globe to network, learn, and engage.

Power packed with panel discussions, keynotes, 1-on-1 and open lounge meetings, the event is an annual meeting point for various companies – hundreds of freight forwarders, agents, container traders, shipping lines, leasing companies, container manufacturers, shippers, and many other logistics businesses.

The conference will bring together interactive panel discussions on container trading market outlook, container leasing market overview, expert-led product demos, and the power of digitalization in the container logistics industry to optimize container operations.

The speakership panel includes container market’s prominent professionals like Michael King, Loadstar; Martin Dixon, Drewry, Eric Johnson, JOC.com; Peter Sand, Xeneta; Andrea Monti, Sogese; Danny den Boer, Seacube, Brian Glick, CEO of Chain.io, Mark De Pasquale, NPSA; Tomas Ananjevas, Supply Chain Services Bureau; Ivan Rasic, Manuport Logitics; Rudy de Groot, BIA Global Logistics, among others.

“With the recent global supply chain disruptions, the logistics industry must realize the need of digital adoption for tackling future uncertainties and bring in efficiency to the container trading market. With DCS 2022, we aim to bring the container trading industry together to exchange knowledge, experience, and innovations and be prepared for the future supply chains and container market disruptions”, said, Christian Roeloffs, cofounder and CEO at xChange.

Working demonstrations of the latest innovations, sustainable solutions, a chance to grow your network, form new deals through 1-on-1 meetings, and get into informal conversations with new potential partners is certain to be just some of the main attractions of DCS 2022. In addition to this, there are new innovative products lined up for their initial launch at the event.

After last year’s successful participation from over 300+ companies, the DCS has introduced open lounges, an opportunity to get in on 1-on-1 meetings.

Grab on your spot and register here for a two-days all-things-containers- summit.

About Container xChange 

February Decrease Keeps 2023 U.S. Container Imports on 2019 Path

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