When global supply chains snap back to some form of normality – widely tipped to be in the second half of the year – transport operators will have to brace for a new headache, with an avalanche of empty containers predicted to cause some chaos.
The delays in the supply chain during the pandemic have led to the need for additional containers to be used. When the supply chain normalises, this will potentially create a pile of 3.5m teu of empty containers from the transpacific alone, according to a new report from Denmark’s Sea-Intelligence.
Sea-Intelligence is warning there could be 3.5m teu of empty containers from the transpacific alone
“When the supply chains start to shorten – and eventually they will – this will release a large amount of empty containers, especially in the US. This will cause widespread congestion problems in the second half of 2022 and in 2023, in terminals as well as container depots, unless carriers and container leasing companies start planning for this development already now,” Sea-Intelligence cautioned in its latest weekly report.
The resolution of the operational bottleneck problems will create a “ripple effect”, Sea-Intelligence suggested, with the potential of overwhelming the empty container depots in the US.
Conceptually, the problem is the same in Europe, as well as any other trade currently subjected to an elongated supply chain.
Mr Chambers,
A very large portion of these (3.5mm) teu would be ready for the grave yard by the time the situation, as you suggest, “normalises”.
Something to bear in mind……
Rgds
Yup strongly agree – as a container trader we’re watching closely but have been waiting for this for some time. So the lines will drop all the old containers from their fleets, pushing 4-6 years worth of used stock into the used marketplace over 1-2 year period. As Rajan suggests some of these will be no good for shipping use but most will still of decent enough quality for the secondary retail market in my mind (ie mainly selling on for storage use), so the sellers will try and lean on us traders to buy as much as we can.
How this can lead to anything but a massive drop in the price of shipping containers due to a massive oversupply i don’t’ know, this is my current bet for the used container market late 2022 onwards.
the secondary market for shipping containers is reasonably consistent and if there is one thing that the last 10 years has taught me, the demand to buy a shipping container is reasonably stable regardless of the sales price. I am selling about as many used 20fts today at approx. £2200 sterling as i was at the bottom of market when i was selling at £750 each. We actually see fewer used 20ft sales when prices are low as the new price will usually fall in line with the used rate, making new 20fts more attractive for storage customers. There is no quick and easy way out here in my mind. a price crash wont’ help stimulate demand (enough)
I can sell these at a reasonable price provided fuel is reasonable