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End to box shortage may be in sight

‘Positive trend’ in Container Availability Index suggests Chinese New Year could be the turning point, says Container xChange

After an extraordinarily difficult 2020, an end to the exceptional container equipment shortage experienced in recent months could be in sight, according to container monitoring specialist Container xChange.

Container xChange highlighted a “positive trend” observed on the organisation’s Container Availability Index (CAx) that it says could make Chinese New Year the turning point, with values for 20-foot dry cargo containers (20DCs) and 40-foot dry cargo containers (40DCs) improving to 0.34 and 0.37, respectively, indicating much higher availability of empty containers than last month.

Developed by Container xChange, the (CAx) index tracks millions of container moves to monitor and forecast equipment availability. An index of 0.5 describes a balanced market, below 0.5 a shortage of containers.

Although the latest figures for January are still well below 0.5 and thus represent a shortage of available containers, those figures for 20DCs and 40DCs are beginning to resemble the ‘normal’ level of container shortfalls experienced for major Chinese export markets, Container xChange noted. Index levels for 40-foot high-cube containers (40HCs) are also significantly higher this month, although at below 0.2 their availability remains low.

David Amezquita, Head of Data Insights at Container xChange, commented: “With a growth of 37.5% for 40HCs and even 200% for 40DCs in January compared to December 2020, the Container Availability Index finally shows a positive trend for shippers and forwarders who are looking for equipment in Shanghai.”

Container xChange noted that that “for months, containers were extremely scarce across China, and prices have skyrocketed to record highs – mainly as a consequence of unexpected demand for containerised goods created in the wake of global social lockdowns.

Johannes Schlingmeier, CEO of Container xChange, noted: “How bad the situation was can be seen in the Container Availability Index (CAx). For Shanghai, a city traditionally known for a deficit of containers, the index reached record lows in December 2020 of 0.13 for 40DCs and to an even lower 0.08 for 40HCs. A minus of 75% and 83% compared to equipment levels in the first quarter of 2020.”

As a side effect, pickup charges for one-way containers skyrocketed to $1,850, and prices for used containers climbed up to $2,493 for 20DCs across China, according to Container xChange.

With Chinese container factories now working at full production, and due to the aggressive repositioning of empties back to China by the shipping lines, Chinese New Year “stands to become the turning point of equipment shortage”, the company indicated.

“With the vast increase we’re seeing in the container availability, Shanghai is on its way back to normal levels. A similar development is happening across other ports in China. Qingdao, for instance, even reaches index values of 0.5 for standard equipment – which represents a balanced equipment situation.”

And for some of the other major hubs across Asia like Singapore, Nhava Sheva and Port Klang, the Container Availability Index shows the same trend, Container xChange said, noting: “Compared to December 2020, container availability is up 58% in Singapore, 35% in Nhava Sheva and 54% in Port Klang across standard container types in January 2021.”

Positive trend to continue in February

Looking at the forecasts, the indications are that the equipment situation will remain stable in the coming weeks, Container xChange added, noting that “until mid-February, the Container Availability Index will settle at around 0.35 for 20DCs and even 0.38 for 40DCs”.

It highlighted that the average availability of containers in Shanghai for 2019, a “normal year” for the shipping industry, puts the recent development into perspective. “Average index values of 0.19 for 40DCs and 0.38 for 40HCs show that Shanghai used to be a deficit location even before COVID-19,” it added

“The positive container availability trend for Shanghai proves that actions taken by the shipping lines are working. The aggressive repositioning, which has grown by 125% in December on the online platform Container xChange, and the increased number of newly built containers contribute to normal availability levels again.”

Container xChange is a leading online platform used by more than 600 companies to buy, sell and lease shipping containers.

Source: Lloyds Loading List

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