After two years of shipping, things are starting to turn

Logistics data showed that container shipping rates, which rose to record levels at the height of the epidemic, declined rapidly, as did container shipments on routes between Asia and the United States.

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After two years of port congestion and a shortage of containers, the unrest is now easing as Chinese exports slow in light of waning demand from Western economies and weak global economic conditions, logistics data show.

Data shows that container shipping rates, which soared to record levels at the height of the epidemic, have fallen rapidly, as have container shipments on routes between Asia and the United States.

“Retailers and buyers or larger shippers are more cautious about the outlook for demand and are ordering less,” Christian Roelofs, CEO of logistics platform Container X Change, said in an update on Wednesday.

“On the other hand, congestion eases as waiting times for ships are reduced, ports run at lower capacity, and container delivery times decrease, ultimately freeing up capacity in the market.”

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Latest Drewry Global Composite Container Index Standard Container Pricing – $3,689 per 40-foot container. That’s 64% lower than the same time last September after dropping 32 weeks in a row, Dre said in a recent update.

The current index is well below record highs of more than $10,000 during the height of the pandemic, but still 160% higher than pre-pandemic rates of $1,420.

According to Drewry, freight rates on major routes have also fallen. The costs of roads such as Shanghai – Rotterdam and Shanghai – New York have decreased by up to 13%.

The drop in freight rates is related to the “sharp drop” in container shipments that Nomura noted.

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Nomura, citing data from US-based Descartes Datamin, said container shipments from Asia to the US for all but rubber products in September fell year on year.

“We assume that the sharp drop in container shipments largely reflects US retailers halting orders and lowering inventories due to the risks of an economic slowdown,” Nomura analyst Masaharu Hirokin said in a note on Wednesday, adding that the bank has yet to see signs of an economic slowdown. Sharp decline in US retail sales.

Port productivity around the world has also fallen. When Shanghai reopened after the recent shutdowns, port traffic volumes rose but were not enough to offset the “wider contraction in port handling levels,” Drewry said.

What is different now

Container xChange said lower container prices and rates in Europe reflect waning consumer confidence.

“The European market finds itself awash with 40-foot containers. As a result, the region is seeing a drop in the prices of these funds,” Container X-Change said.

Logistics companies said the trends in logistics and supply chains in the past two years have reversed. During that period, the shortage of containers was constant as a result of delays in ports affected by the closure and increased demand.

Container xChange said lower container prices and rates in Europe reflect waning consumer confidence.

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Now that demand for containers is dropping and so are their prices, Danny Dean Boyer, director of sales for Seacube Containers, said at the Digital Container Summit earlier this month.

Andrea Monti, CEO of Sogese, said at the same conference that idle time for containers is also rising.

Container xChange Account Manager Gregoire van Strydonck said at the conference: “Containers are piling up at a lot of import-led ports. Shippers are abandoning containers just because containers are stuck there.”

Subal Shah, CEO of India’s Arcon Containers, said factories in China have halted production for the foreseeable future.

“We’ve been hearing for four months,” he said at the Digital Container Summit.

“Container warehouse space is full in China, Europe, India, Singapore and most of the world.”

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