Average cargo container prices have declined more than 50 percent from last August, as China containerized trade volume picked up, according to an analysis published Thursday by Container xChange, a technology marketplace and operating platform for container logistic companies.
The monthly report from Container xChange said the drop in container prices and leasing rates offers an opportunity for shippers and freight forwarding companies to expedite cargo in the midst of the peak season, typically from July to September.
Trade in China was negatively impacted in the first half of the year, but the containerized trade seems to have picked up since last month, according to Container xChange.
“Shippers are once again hoping that the exports will restore in full swing as the industry prepares for the peak season,” Christian Roeloffs, co-founder and CEO of Container xChange, said. “Amidst this, there are more reasons for shippers to rejoice as the average container prices and one-way leasing rates Ex China shows a downward trend at a time when shipping is historically at its peak in the country.”
The Shanghai Container Availability (CAx) index was 0.58 in week 33 as compared to 0.52 in 2021, and 0.32 in 2020. A CAx value of less than 0.5 indicates that more containers are leaving a port in the same week. On the other hand, a value of more than 0.5 indicates that more containers are entering a port in the week.
The report said the high CAx value could potentially mean that there are more containers in China as compared to the last three years at reduced prices, making it easier for shippers and freight forwarders to plan trips from China.
“This is the peak shipping season and the industry expects heavy outflow of containers from China to [fulfill] orders from demand centers,” Roeloffs said. “This year, we haven’t witnessed two key trends that are a norm during this time in previous years–a rise in leasing rates and container prices in China and a decline in CAx values.”
One-way leasing rates for standard containers were in the range of $100 to $300 before June 2021. The rates picked up from July 2021, skyrocketing at $1,470 in the month and peaking by September to reach $2,792, the report noted. The leasing rates then started to decline. This May, the leasing rates stood at $1,277, the dropping to $1,095 in June and further to $906 in July.
Meanwhile, Drewry’s composite World Container Index (WCI) decreased 3 percent to $6,223.82 per 40-foot container or equivalent unit (FEU) for the week ended Thursday–the 25th consecutive weekly decline–and was down 35 percent compared with the same week last year.
The latest Drewry WCI is now 40 percent below the peak of $10,377 reached in September 2021, but it remains 71 percent higher than the five-year average of $3,631. The average WCI year-to-date was $8,056 per FEU, which is $4,425 higher than the five-year average.
Freight rates on Shanghai-Los Angeles and Shanghai-Rotterdam each fell 5 percent to $6,521 and $8,430 per FEU, respectively. However, rates on New York-Rotterdam gained 1 percent to $1,298 per FEU.
Rates on the heavily traveled Los Angeles to Shanghai, Shanghai to New York and Rotterdam to New York routes hovered around the previous week’s level. Drewry expects the index to decrease in the next few weeks.