The "Container Logistics Monthly Report" released by Container xChange, a container leasing and trading platform, pointed out that in May this year, the average price of global containers rose for the first time month-on-month. The average price rose 15% to $4,410 from $3,800.
Container xChange co-founder and CEO Christian Roeloffs said,
“We expect a surge in container volumes on the trans-Pacific route, which will help improve vessel utilisation on this route, and we will see spot rates surge in the upcoming peak shipping season.”
Roeloffs expects container prices to surge in the short term as pent-up demand for containers surges, especially given the peak shipping season ahead. But in the medium to long term, container prices will fall, container availability will rise, and container turnaround times will normalize.
An indicator cited by Goldman Sachs shows consumption of goods about 5% higher than before the pandemic and 15% below its peak. However, demand has never been the biggest driver of price increases. Due to supply chain congestion, container turnaround times are much longer than before, resulting in a shortage of containers, coupled with a slight increase in demand leading to the current market conditions. Therefore, a slight reduction in demand will not bring about a noticeable change in the market.
According to Roeloffs, “Consumer demand is not the most important cause of market volatility, but it is a shock to the supply chain because it takes longer to get from point A to point B, resulting in a shortage of containers available for transportation.”