A new report from Container xChange shows that container prices are finally on the rise, and in a big way. May was the first month the average price of containers grew month on month, and with an average of 5.4%, jumping from $2,207 to $2,330. However, after two months of lockdown in China, container prices remain low there. There will likely be a jump in containers in the transpacific, driving higher utilization of vessels on the route and a jump in spot rates.
Per Container xChange:
- If we look at the west, there is major congestion in Los Angeles and Houston. It has become particularly challenging to find open depots and moving units in Shanghai. Depots in Rotterdam are also quite full, followed by Hamburg (but less flagrant than Rotterdam).
- To sum up, I think the consumer demand (and eventually presumable unprecedented container demand) wasn't the biggest driver of the destabilization of market, but it was rather a sort of supply shock and that there were just not enough boxes to go around and because they took longer to move from A to B.
We do foresee a gradual increase in demand for smaller vessels meant for smaller trade networks. This is because there will be an uptick in more complex networks with more stops and longer turnaround times. Supply chain routes and transhipment lanes are being reimagined to build resilience and to lower the reliance on bigger trade blocks. So, in a way, diversification of trade blocks to diversify the supply chain risks.