Container surcharges are piling in as global supply chains shudder from an extraordinary shortage of available forty foot boxes in no small part down to the booming transpacific tradelane to the US.
“Getting empty 40’ containers in China to take advantage of the lucrative rates on headhaul trades has become a top priority for the carriers. Carrying cargo at low rates on backhaul trades is obviously becoming less interesting as the inland transport and the stuffing and stripping of the boxes takes extra time,” Alphaliner explained in its latest weekly report.
This is the new Consumerindustrial Revolution
The Speciality Soya and Grains Alliance (SSGA) has reported that German carrier Hapag-Lloyd decided to suspend US agricultural exports for the foreseeable future.
“The export suspension is being driven by the need for ocean carriers to get their containers back to Asian manufacturing centers as quickly as possible to handle burgeoning, higher value imports to the US,” the alliance warned, adding: “Some carriers are apparently willing to send empty containers immediately back to China for faster turnaround”.
Hapag-Lloyd conceded in a note to clients the limited supply of feu is “an enormous unseen challenge”.
A spokesperson for Container xChange, a platform that sources available boxes for shippers, told Splash today: “We can see the container availability, especially in Shanghai and Los Angeles, drastically decreasing to values of 0.04 and 0.22 for 40HCs, the size popular for consumer goods.”
On the platform’s Container Availability Index above 0.5 indicates a surplus and below 0.5 indicates a deficit of containers. 0.04 is the lowest point recorded this year.
Analysts at Sea-Intelligence noted in their most recent weekly report: “The skewed geographical development of the demand recovery means a rapidly escalating equipment imbalance issue, which becomes especially acute for North America and Asia.”
The deficit of containers in Asia is “rapidly worsening”, according to Sea-Intelligence.
“As the freight rates at the same time are reaching record levels on the Asia export trades, the carriers are clearly prioritizing to get empty containers shifted back to Asia as fast as possible – even to the degree where they are willing to forego viable export cargo, as that would serve to slow down the repatriation of empty containers,” Sea-Intelligence pointed out, explaining what happens when changes in both demand and supply outpace the ability to move empty containers around the world.
“It is – relatively speaking – easy to adjust capacity when demand changes, but it is not possible to rapidly shift empty container across the world,” Sea-Intelligence observed.
This also means that the bottleneck issues currently seen in many locations will take time to resolve with rival analyst Alphaliner predicting the issue would remain until Chinese new year in February.
Limited access to available containers are also driving up rates for new boxes. Chinese manufacturers, which dominate the container market, are now charging about $2,500 for a new container, up from $1,600 a year ago. Likewise, leasing rates have rocketed, up by around 50% in the space of just six months.
Freight rates across most container tradelanes have leapt in recent months, some to record levels. The transpacific has led the way and shows no sign of slowing down.
Steve Ferreira, the CEO of New York-based consultancy Ocean Audit, noted via LinkedIn over the weekend that key American retailers such as Walmart, Home Depot, Lowes and Target are shipping 300% of their normal peak volume now.
“This is the new Consumerindustrial Revolution,” Ferreira quipped.