A series of unusual events triggered by the epidemic and the Suez Canal accident led to a serious container shortage crisis. This situation can be classified as global, because the shortage of containers will have a knock-on effect on all supply chains and fundamentally disrupt international trade.
Due to the strong demand in North America, a large number of containerized goods from Asia were shipped to North America, and only a few containers were shipped to Asia. So far this supply asymmetry has evolved into a terrible imbalance. There are reports that North America has become a global container shortage. The main reason.
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At a press conference this month, Hapag-Lloyd CEO Rolf Habben Jansen stated that the current market conditions have increased container usage time by approximately 20% compared to before the outbreak.
"In fact, this means that the same amount of goods requires an increase of about 20% of the box." He said.
Shipping companies have been busy extending lease periods at higher prices and are actively purchasing additional containers from each leasing company. Both in terms of daily rent and lease terms, their bids will exceed their competitors.
▍The average container price surged 94% in the past 5 months
As shipping companies keep their containers longer than before, the prices of new and old containers are soaring.
From November last year to March this year, the average price of second-hand 20'-foot containers soared by 94% to US$2,521.
Since the summer of 2020, the continued growth momentum of container transport trade has not slowed down, which is reflected in the shortage of containers in Asia and other regions. It is expected that due to the chain reaction of the closure of the Suez Canal further disrupting the availability of shipping services and containers, the market will tighten further in the coming weeks.
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The price of a good 5-year-old second-hand container is now much higher than the price of a new container before the epidemic.
The price of a standard old container in China that has been used for several years is about US$1,000, while the price of a new container is about twice this price.
Now in the current market, the price of second-hand containers in China is between US$2,300 and US$2,600, while the price of new containers, such as in Shanghai, has soared by 64% this year, reaching an average of US$3,390.
▍North America is the main cause of global container shortage
As the import demand in the United States continues to grow, the blocked logistics chain continues to slow down the turnover of containers. The difficulty of purchasing containers in Asia is increasing. According to JOC, the shortage of containers in Asia will intensify in May.
Prior to the outbreak, North America was structurally responsible for the 40-45% imbalance of containers needed in Asia. This situation changed drastically after the early fluctuations in the epidemic. North America is now structurally responsible for 55-60% of the Asian box imbalance.
Now the imbalance problem needs to be corrected through North America. At the same time, North America is the place where the port congestion is the most serious, which slows the effort to return the container. With fewer working hours, North American terminal productivity is 50% behind its Asian counterparts.
The latest data from PIERS, which tracks U.S. imports and exports, shows that compared with March 2020, the volume of container shipments from Asia to the U.S. increased by 90% in March. Even if the data from March 2021 is compared with March 2019 before the pandemic, its traffic growth has reached a record 57%.
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