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Container shortage – Chinese New Year set to be a turning point

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The container shortage, which has seen freight rates skyrocket, could be at a turning point over Chinese New Year according to Container xChange as availability starts to improve at key exports hubs such as Shanghai.

Capacity management by container lines through blank sailings to deal with the sharp drop off in volumes in the first half of 2020 due to Covid-19 lockdowns left equipment in ports on the wrong side of the world as volumes surged back as much as 30% in the second half of the year.

The result was that Container Availability Index (CAx) from Container xChange in Shanghai dropped to 0.13 in December for 40-foot dry containers and 0.08 for hi-cube containers, with any index below 0.5 considered a shortage. The equated to minus of 75% and 83% compared to equipment availability levels in the first quarter of 2020.

In some good news for shippers the index is now showing a positive trend of 0.34 for 20-foot dry containers and 0.37 for 40-foot dry containers according Container xChange, and it believes this could represent a turning point as Chinese New Year approaches, even if lines do not appear to expecting the traditional lull in demand.

“With a growth of 37.5% for 40HCs (hi-cubes) and even 200% for 40DCs (dry containers) in January compared to December 2020, the Container Availability Index finally shows a positive trend for shippers and forwarders who are looking for equipment in Shanghai”, said David Amezquita, head of data insights at Container xChange.

Container xChange noted that with an aggressive repositioning of empty containers to China and Chinese container manufacturers at full production the Chinese New Year period could now prove to be a turning point in terms of container availability.

At another major Chinese load port, Qingdao, the index has reached 0.5 implying a balance in demand and supply of equipment.

Looking at a number of other major Asian ports outside China Container xChange also reported a sharp improvement in the availability of equipment in January 2021 over December last year. Compared to December 2020, container availability is up 58% in Singapore, 35% in Nhava Sheva and 54% in Port Klang across standard container types in January 2021, it said.

It could prove to be a mixed blessing for container lines, though, as while it will ease the logistical problems they have faced, and large scale rollovers of shipments, it is also likely to dampen freight rates which had reached record levels.

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