Container shortages, port congestion and ship delays have pushed freight rates sky-high

According to online trading platform Container xChange, the shutdown of Yantian port in southern China in June caused container freight rates to skyrocket by 180%.

containers

There is a serious shortage of containers (Photo: WSJ)

This index on the Container xChange platform shows that the average freight rates of routes for all types of containers exported from the port of Yantian, have increased from $ 5,515 in June, to $ 15,336 this month.

Christian Roeloffs, co-founder of Container xChange, said: “We saw a real and measurable spike in container prices and a major drop in container availability when terminals at Yantian saw operations disrupted through most of June”.

And he said there were "early indicators" of a similar impact from the recent port disruption following lockdowns at Ningbo terminal and Vietnam ports.

But even without further disruptions, a severe shortage of container equipment due to strong demand and worsening port congestion will drive prices of new and used containers higher, according to the CEO. and founder of Container xChange, Dr. Johannes Schlingmeier.

Dr Schlingmeier said: “It is likely that container prices will rise on lower availability in the coming weeks, due to the lag between liner schedule disruption and container availability and pricing."

A UK-based NVOCC decided to buy 10 40ft containers in China. To fix the equipment failures that this company is experiencing from shipping lines, the company said it ended up paying nearly $6,000 for an old container.

In theory, manufacturers are selling the same new container for around $4,000, but buyers are limited by orders from container leasing companies and shipping carriers, the company said with The Loadstar.

Meanwhile, ocean carriers are doing their best to strengthen their container fleets to meet growing shipping demands and minimize the impact of extended lead times on cargo containers.

Due to network congestion, the carrier now needs 11% more containers to carry the same amount of cargo, according to Hapag-Lloyd CEO Rolf Habben Jansen.

And a prolonged backlog of new orders at container factories means that carriers are having to rely more heavily on leasing companies to meet their urgent requests.

Triton, the market leader in container leasing, said in its second-quarter earnings report that it is focusing on extending the duration of its new and used container leasing contracts with shipping lines. The company recorded an average lease term of 14 years in Q2, up from the 10-year average in Q1, almost double the historical industry average.

Elsewhere, Textainer, the world's second largest container leasing company, reported an average lease term in the first six months of the year for new containers of 12 years.

Similar to container ship owners, container leasing companies not only agree to much longer container leases with carriers, but they can also negotiate significantly higher daily rental rates for their new transactions.

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