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Container congestion builds but box shortage crisis eases
Asia-Europe box port congestion continues but container prices reduce
Box port congestion has been growing in Asia and Europe – but in a positive move, container prices in China have dropped.
VesselsValue trade analyst Gwen Billington tells CST, “Container congestion continues across Europe this week [start of November] as retailers attempt to stock up for Christmas and the holiday season. In the UK, Felixstowe has three large container vessels with a total capacity of 45,484 TEU currently waiting at anchor, and five feedermax vessels are waiting at anchor off Anglesey, destined for the port of Liverpool. Some vessels are being diverted from UK ports to unload in Europe, in a bid to avoid the worst of the congestion.”
Northern Europe has also seen an increase in the number of vessels waiting. According to VesselsValue data, eight container vessels with a total capacity of 63,485 TEU are currently waiting for berths in Antwerp or Rotterdam. Ms Billington says, “Persistent delays and late arrival times for container ships are wreaking havoc with vessel scheduling, causing some European ports to work on a first-come first-served basis, and leading to difficulties in storage and onward movements.”
UK’s Port of Felixstowe has also suffered congestion. A blog by VesselsValue noted in October that congestion was building up, “as a severe shortage of truck drivers means containers are piling up in port storage yards, making it increasingly difficult to unload containers and reload empty containers back to Asian ports”.
Due to the issues at Felixstowe, in October Maersk asked customers in the UK to return empty containers to alternative locations.
As container congestion builds in the import ports, export port congestion in Asia remains significant. VesselsValue notes that as of the first week of November, the ports of Ningbo and Zhoushan in the East China Sea have 32 container ships waiting, with a total capacity of 231,315 TEU. This is considerably reduced from the numbers waiting at the beginning of September (down 55%), but up from the 26 vessels waiting in mid-October. The ports of Shenzhen and Hong Kong have 45 container vessels waiting, with a total capacity of 336,951 TEU. The longest-waiting vessel is Panamax container ship Interasia Horizon, which has been at anchor since 3 October 2021.
Ms Billington says, “With the vestiges of Covid-19-related port closures and continued high level demand for goods, supply chain and container ship congestion remains significant across Asian and European ports.”
Volumes up, rates up
Volumes on the Far East to Asia trade leg so far this year show an increase compared with the same period last year, with Container Trades Statistics (CTS) data showing that volumes from January to August totalled 11.25M TEU, up by 11.27% on the 10.1M TEU recorded for the same period last year. While the figures for the remaining months of this year have not come in yet, last year 15.76M TEU was moved on this leg of the trade.
On the Europe to Far East trade leg, volumes for January-August this year reached 5.3M TEU, according to CTS data, up only a tiny 1.8% on the 5.29M TEU achieved last year.
CTS’ aggregated price indices, from and to Far East to Europe, show the huge jump in rates on both legs. On the Far East to Europe leg last year, the price index dipped as low as 57 points in May and July, rising to its highest point, 114, in December. This year, it started at 167 in January, soaring to 259 in August.
CTS’ data shows that on the Europe to Far East tradeleg, it started at 70 in January and rose to 98 in December last year, while this year, it started at 101 and rose to 122 in August.
Box trading and leasing prices fall
For the first time in 2021, container trading and leasing prices have fallen in China, giving a temporary respite for the industry.
Prices eased soon after China’s Golden Week national holiday, according to Container xChange, which has published container prices data trends that indicate the average standard container prices in China have plunged both for trading and leasing.
Its data highlights that average container prices eased after Golden Week, with prices rising to a record high of US$8,516 (40 high cube) and US$3,017 (20 dry container) in September.
The average used 40 high cube container price dropped by 23% to US$6,594 in October, with one-way container leasing rates stabilising.
“We are experiencing market improvements as the one-way leasing charges, spot rates and other freight costs are starting to stabilise and average standard container prices are witnessing a drop for the first time in many weeks. Though we are yet to see how the market responds further to inventory stocking by the US importers in the coming months, these are good signs of market correction. The drop in prices could also be a temporary decline due to Golden Week in China if the prices do not decline further,” says Container xChange founder and chief executive Christian Roeloffs.
Container xChange founder and chief executive Dr Johannes Schlingmeier adds, “The easing prices show temporary consolation in the global container shortage crisis. The trend may continue because we are halfway through the busiest time for the shipping industry. Retailers are looking to pile up stock ahead of the Christmas holidays and the falling prices could become the new normal. This could be an early sign of market stabilisation. We will continue to monitor prices and availability but for the time being, this is good news for the industry.”
Average trading prices fall
The average trading price of 40 high cube containers has dropped in China since week 39, just ahead of the Golden week. Container xChange data shows that from US$8,516 in week 39, the average prices have plunged to US$6,598 in week 42, a 22.5% decline which is the biggest decline witnessed this year in China.
Container xChange notes that at different ports in China, the average trading prices have reduced from 1 % to 11% for 40 high cube containers, with Qingdao recording the highest 11% plunge from last month, Ningbo 2%, Shanghai 3.4%, Shenzhen 1.7% and Tianjin 0.5%.
A 20-ft dry container now costs an average US$3,000, which has plateaued since the beginning of September from US$3,017.
Container xChange says, “As per the platform data, 46 ports globally experienced a moderate pullback in average container prices. The hotspots include China, Vietnam and the United States. These price falls indicate improvement in congestion which caused skyrocketing freight costs all over the world.”
Container xChange’s data shows the average one-way leasing pickup charges for the China-US stretch are down to US$1,800 from US$2,767 in one week (from week 39 to week 40), a 35% plunge, the highest recorded this year on this stretch. Similarly, these rates have also reduced for stretches from China to some ports in Europe (Hungary, the Netherlands, Slovakia) and Russian Federation.
Container xChange’s analysis sums up, “While the demand will continue to stay strong as the retailers aim to fill the stock ahead of the Christmas holidays, the all-in rates are expected to stay strong too. The situation is more likely to improve by early November and further after the Chinese New Year in February 2022.”
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