Tuesday, November 23, 2021

Latest Report on US Shipping Container Situation Makes Uncomfortable Reading

As Prices Drop so Empty Box Stocks Continue to Rise
Shipping News Feature

US – WORLDWIDE – Container xChange, the online platform founded just four years ago in Germany and which aims to make using third party equipment a more simple process, be it any form of shipping or tank container (via recent acquisition TankContainerFinder.com), has issued its latest assessment of the US box market.

The company uses what it calls its Container Availability Index (CAx) to measure what equipment is available to illustrate to its customers container trading and leasing published container prices and availability data across the key ports of the United States. Currently the majority of ports in the United States struggle to process the soaring flow of inbound containers despite recent high shipping rates.

In October however the average shipping container prices fell in the month by an average of 10% at the ports of Los Angeles, Long Beach and more recently the port of Savannah too. The ports in the US are showing very high container availability values consistently as compared to the year 2020 and 2019 (pre-pandemic times). On a global scale, about 78 ports recorded CAx values higher than 0.50 (the value of 0.50 represents the ideal balance of inbound and outbound containers).

As per the data recorded by Container xChange, the average prices for 40 foot High Cube containers have dropped by 10.7% from $4863 to $4342 from the month of August to November at the port of Long Beach. At the port of Los Angeles, a 20 foot dry container costs $1850 and a 40 High cube costs again around $4342. Overall, the average one-way container leasing pickup charges on China to United States stretch have also been slashed after peaking in the month of September, from $2810 to $1760 in October.

Looking at the inbound/outbound container data by Container xChange, CAx values that are consistently above 0.70 indicate that these ports have been importing an increasing number of containers for a long period and the exports are impacted due to prevailing supply-chain factors. Particularly the port of Long Beach and Los Angeles have consistently shown CAx values higher than 0.80 since the beginning of the year which shows the catastrophic problem of higher inbound containers at these ports. The situation is similar at ports like Oakland, Seattle, Tacoma, and other ports in the US West Coast.

The CAx at the port of Long Beach is 0.88 this week, which is the highest since the year 2019. The CAx values stood at 0.67 in 2019 and at 0.68 in 2020. The higher CAx values indicate that in proportion to the inbound containers, outbound containers are much higher. The gap is at its peak at the port. Even the ports in the US East Coast like the port of Savannah, have experienced the dip in the average prices for containers.

A 40 foot high cube container costs $4607 in November while it cost $5224 in September, down 11.4%. At the port of Savannah, as of week 47, the CAx stands at 0.94 which was 0.81 in 2020 and 0.84 in the year 2019 during the same week. Clearly, the port. Is handling very high number of inbound containers this year as compared to the past two years.

The Port of Oakland, for instance, showed up a general CAx values between a range of 0.36 to a maximum of 0.65 at a given week throughout the year 2020, currently it is somewhere in the range of 0.70 to 0.96 at any given week in the year 2021. Dr Johannes Schlingmeier, CEO and co-founder of Container xChange observed:

“The United States being an import destination of containers, has witnessed extraordinary number of vessels this year as the demand grew exponentially, especially in the North America region. This has crippled the supply chain because the ports and the supporting ecosystem has not been prepared adequately.

”We need measures to collectively improve the situation at these ports, which has had a domino effect on other ports and in fact on the global supply chain. As per our forecast, the container prices will level off at a new normal that will be at least twice the pre-pandemic cost by the end of next year 2022.”