After two years of shipping spins, things are starting to turn around

After two years of port congestion and container shortages, disruptions are now easing as Chinese exports slow in the face of slowing demand from Western economies and softer global economic conditions, logistics data show.

Container freight rates, which rose to record prices at the height of the pandemic, have fallen rapidly, and container shipments on routes between Asia and the United States have also plunged, data show.

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

“On the other hand, congestion eases with vessel waiting times being reduced, ports operating at less capacity and container turnaround time decreasing, ultimately freeing up capacity in the market.”

The latest Drewry composite World Container Index – an important benchmark for container prices – is $3,689 per 40 foot container. That’s down 64% from the same time last September after falling for 32 straight weeks, Drewry said in a recent update.

In Europe, sliding container prices and rates reflect declining consumer confidence, Container xChange said.

Nurphoto | Nurphoto | Getty Images

The current index is well below record highs of over $10,000 during the peak of the pandemic, but is still 160% higher than pre-pandemic prices of $1,420.

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

The falling freight rates are linked to a “sharp decline” in container shipments, observed by Nomura Bank.

Nomura, citing data from US-based Descartes Datamyne, said container shipments from Asia to the US for all products except rubber in September fell year-on-year.

“We assume that the sharp decline in container shipments largely reflects US retailers halting orders and reducing inventories due to the risk of an economic slowdown,” Nomura analyst Masaharu Hirokane said in a note on Wednesday, adding that the bank has yet to have not seen signs of a sharp decline in US retail sales.

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

What is different now

In Europe, sliding container prices and rates reflect declining consumer confidence, Container xChange said.

“The European market is finding itself flooded with 40ft high cube containers. As a result, the region is experiencing a drop in prices for these boxes,” said Container xChange.

How labor declines in German, Dutch ports create a backlog of exports bound for the US

Logistics and supply chain trends from the past two years have reversed, logistics companies said. During that period, container shortages were constant due to delays in ports affected by shutdowns and increasing demand.

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

The idle time for containers is also increasing, Sogese CEO Andrea Monti said at the same conference.

“Containers are piling up in a lot of import-led ports. Shippers are giving containers away just because containers are stuck there,” Container xChange account manager Gregoire van Strydonck said at the conference.

India’s Arcon Containers CEO Supal Shah said factories in China have stopped production for the foreseeable future.

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

“The container depot is full in China, Europe, India, Singapore and most parts of the world.”

Related Posts

Illinois Democrats accuse GOP operative Dan Proft of illegal coordination

The Illinois Democratic Party on Friday filed a complaint with the Illinois State Board of Elections against Republican gubernatorial candidate Darren Bailey’s campaign and the conservative head…

NYC’s Ruth’s Chris Steak House stabbing leaves patron injured, NYPD seeks female attacker

A woman dining at Ruth’s Chris Steak House in Manhattan stabbed a male patron in the chest after becoming enraged by his argument with an employee Friday…

Watch: Parrot steals journalist’s earphone live on air

A Chilean reporter was live in the air when a parrot landed on his shoulder and stole his earphone. Nicolas Krumm, a journalist for the Chilevision channel,…

FOX Bet Super 6: Win the $25,000 College Football Pick 6 jackpot in Week 10

FOX Bet Super 6 College Football Pick 6 Challenge gives fans the chance to win $25,000. The first College football Playoff standings (CFP) were announced this week….

Elon Musk begins Twitter overhaul with mass layoffs

Elon Musk begins Twitter overhaul with mass layoffs – CBS News Watch CBS News Thousands of Twitter employees found out via email that they were let go,…

Remains of missing Bay Area woman Alexis Gabe have been found

The partial remains of a Bay Area woman were discovered in a small community east of Sacramento on Thursday, according to authorities. The remains have been confirmed…

Leave a Reply

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