It does not seem all that long ago we were reporting on shortages of shipping containers – see our report from last year: Box Shortage Sees Return of Breakbulk and from October 2021 The Ongoing Container Shortage. Everything was thrown out of whack, of course, by the Covid Pandemic in 2020. Now it seems the tide has turned and there is a global oversupply of containers.
This week a new report has been released by Drewry, who are leading independent providers of research and consulting services to the maritime and shipping industry.
Drewry expects the global pool of shipping containers to contract in both 2023 and 2024. While stubbornly high levels of inflation in many countries is depressing demand, increasing geopolitical instability is affecting investor sentiment, with both factors depressing the growth prospects for world trade. Shipping lines and container lessors are ridding themselves of surplus boxes built up in the fleet over the past two years or so, and not replacing equipment being sold into the secondary market.
One of the contributing factors affecting the situation is the change in trade stats between China and the USA. Earlier this year, it was revealed that since January (2023), US imports from China have declined by 16.2% and are expected to be 25% lower ‘year on year,’ according to research released by Hellenic Shipping News.
They looked at the Container Availability Index (CAx), which measures the ratio of inbound to outbound containers port-wise, and it suggested that ports in China currently have a higher CAx value than in 2019, 2020, 2021, and 2022, indicating a significant container surplus in China.
A higher CAx index rating means that there are more inbound containers than outbound containers. Thus, if China’s outbound containers are low, it suggests that the main import countries have not been importing goods from China as usual.
The most serious oversupply of equipment is in the 40ft high-cube segment, because in late 2020 and throughout 2021, this was the type of box that was in greatest demand. In 2021, this size of container accounted for over 85% of all dry freight containers produced. The scale of oversupply means that any equilibrium for 40ft high-cube containers is unlikely to occur before 2025, unless of course there is a sharp turnaround in trade.
In 2024, Drewry expects a modest recovery to take place in their purchasing plans, largely based on more ageing containers being replaced, and for this to increase more strongly in 2025.
The recovery in container production anticipated from 2024 is based on both a modest recovery in trade, as well as the ongoing capture by container shipping of cargo from other sectors of the freight transport industry.
By 2027, Drewry estimates that the global pool of containers will have increased 7% over the years from 2023.
As licensed Customs Brokers and International Freight Forwarders, Colless Young provides a complete range of shipping and allied transport services including connections by road and rail as well as warehousing. We professionally handle all your consignments by sea and air, both import and export, taking care of customs clearance, quarantine treatments and landed costings. With out head office in Brisbane, Colless Young offer logistics facilities through all major Australian ports and airports.
