Container Shortage is Easing with Chinese New Year as Turning Point
The ongoing shortage of containers that started in the second half of 2020 has been one of the big challenges for shippers and carriers alike. While some forecasts expect the container shortage to continue well into 2021, a new analysis by Container xChange, a platform to buy, sell and lease containers, shows a positive trend in availability. They are suggesting that the upcoming Chinese New Year holiday period could be the turning point.
The container shortage began in mid-2020 as the demand for goods grew in the wake of the first wave of shutdowns around the globe. As containers grew more difficult to locate, prices skyrocketed to record highs, and shipping lines imposed equipment surcharges.
Container xChange is reporting a positive trend for its Container Availability Index. Developed by Container xChange, the 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”, according to Dr. Johannes Schlingmeier, CEO of Container xChange.
To illustrate how tight the situation became in major ports they highlight Shanghai, a city they say is 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. That represented a decline of 75 and 83 percent compared to equipment levels in the first quarter of 2020.
“With a growth of 37.5 percent for 40HCs and even 200 percent 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,” says David Amezquita, Head of Data Insights at Container xChange.
The index is showing a return to normal levels in Shanghai and other major ports across China. In Qingdao, the index shows a balanced equipment situation. Similarly, at other major hubs across Asia, including Singapore and Port Klang, the Container Availability Index shows the same trend. Compared to December 2020, container availability is up 58 percent in Singapore and 54 percent in Port Klang across standard container types in January 2021.
Looking at the forecasts, Container xChange says the indications are that the equipment situation will remain stable in the coming weeks. Until mid-February, the Container Availability Index will settle at around 0.35 for 20DCs and even 0.38 for 40DCs.
The positive container availability trends prove that actions taken by the shipping lines are working says Container xChange. They reported that the aggressive repositioning, which has grown by 125 percent in December on their online platform, along with the increased number of newly built containers contribute to normal availability levels again.