A year-to-date (YTD) analysis of global container leasing transactions by Container xChange shows a notable uptick in average rates since the beginning of 2024, indicating an uptick in demand for container leasing services and increased financial burden on lessors, pointing to a potentially tighter market.
The study also highlights persistently strong container trade patters between China and Russia, Taiwan and India, China and India, amongst other hot trade routes so far in this year 2024.
“China to North America one-way container leasing rates have increased particularly in 2024, with the rise mostly driven by a widening container price delta between China and the U.S. (China becoming ‘more expensive’ up until March vs. U.S. container prices stagnating or decreasing),” says Christian Roeloffs, co-founder and CEO of Container xChange.
Key takeaways:
- There has been a significant spike on the China to Canada ports from February to March. Yantian to Toronto rates surged by 68% from February to March. These were $730 in February which peaked to $1230 in March. The Qingdao to Vancouver leasing rates surged by 64% in one month. Ningbo to Toronto rates surged by 35%, Shenzhen to Toronto rates surged by 26%, Tianjin to Toronto rates surged by 23%.
- Average container prices in Russia remain weak, as low as $811 for a 40-foot cargo-worthy container as of April 11, which was upwards of $4,000 during the peak season until Feb 2022. This rate is the lowest in 2024 so far that container traders have witnessed in Russia. This is because of added complexities of repatriating boxes out of Russia.
- An analysis of the average monthly container prices over the past three years reveals a consistent YoY downward trend, with 2024 recording the lowest average container prices across the major U.S. ports. This marks the third consecutive year of declining monthly average container prices at these ports.
- Expect an improved outlook for leasing on China-U.S. route and a consistently strong trade between China-Russia.
- The container logistics market is poised for stabilization, and market volatility is not projected to cause the container prices to spike significantly yet. This is also because of the high over-capacity overhang that still exists in the market and acts as a shock absorber for the container market. On the other hand, container leasing market stays strong.
“Fluctuations in both demand and supply lead to significant volatility in container logistics. Currently, we see a widening gap between demand and supply, with demand subdued and supply high due to a whiplash effect from orders during the 2020/2021 period. This leads to (over)supply effectively absorbing disruption shocks and keeping container prices subdued, even as operational costs continue to rise,” says Roeloffs. “One-way leasing rates, on the other hand, are mainly driven by (a) increasing financing costs and (b) differences in container prices between origin and destination. This leads to e.g., China-U.S. leasing rates to increase on the back of a widening container price delta.”
