For the first time this year, in May, average global container prices soared by an average of 5.4% (from US$2,207 to US$2,330) for 20-foot DC equipment and 15% (from U $3,800 to $4,410) for the 40-foot HC. However, average container prices and leasing rates continue to decline in China, even as the Asian country reopened after two months of massive COVID-19-related lockdowns, according to Container xChange’s monthly container logistics report.
“We expect a surge of containers on the Transpacific, which will lead to increased utilization of ships on this route. We could see an increase in spot rates, especially with the upcoming high season,” said Christian Roeloffs, co-founder and CEO of Container xChange.
“Not only was Shanghai on lockdown, but now Beijing and its biggest port, Tianjin, are still on lockdown. All the cities are so interrelated influencing the whole of China. For example, Shanghai is the main center for producing auto parts and Shenzhen is for assembly. Since no parts are shipped to Shenzhen, nothing can be assembled, and therefore exports out of Shenzhen also slow down,” Roeloffs explains.
“If we look west, there is a lot of congestion in Los Angeles and Houston. It has become particularly challenging to find open warehouses and trucks in Shanghai. The Rotterdam depots are also quite full, followed by Hamburg and less blatantly than Rotterdam,” he notes.
“We saw a decline in container values in recent months in China because there was a lack of demand there. In the short term, we expect an increase in prices because the (cumulative) demand for equipment will skyrocket, especially as the peak season approaches,” he adds.
“However, in the medium to long term, we expect container prices to decline, availability to increase, and turnaround times to normalize because we expect supply chain disruptions to decrease,” Roeloffs projects.