Transpacific box line freight rates nosedive as demand falls
The Asia – US spot rate components of the Freightos Baltic Index (FBX) slumped this ...
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By Mike Wackett
Some container vessels have been sailing from Asia to Europe under-utilised in recent weeks due to an acute shortage of empty boxes.
A carrier source told The Loadstar: “We have had to sail light a few times recently as there are just not enough boxes at depots [in China] to meet the demand.”
All carriers report severe shortages of the popular 40ft high-cubes (HCs) at their depots, and there has also been a run on 40ft standard boxes – even 20ft containers are sometimes showing as unavailable.
The latest container availability index report from Container xChange shows availability across China “still at a record low”.
It adds: “Due to the fast increase in demand after months of blank sailings, container availability for 40ft HCs across China is currently at just 0.05 CAx points, compared with 0.63 at the same time last year.” A reading above 0.5 indicates a surplus, below suggests a deficit.
Forwarders have had to scramble for boxes due to the more lucrative transpacific trade securing the biggest share. However, big spikes in spot rates from Asia to Europe in recent weeks seem to have levelled the playing field on competition for boxes between the two tradelanes.
To mitigate the serious equipment imbalance, ocean carriers have adopted an aggressive strategy for European and US exports, temporarily suspending bookings, preferring to fill backhaul ships with as much empty equipment as possible.
Indeed, to deter all but the most valuable cargo, European exporters to Asia are being asked to pay in excess of $5,000 per 40ft to secure a December shipment, and one UK forwarder told The Loadstar many carriers were now refusing to accept export bookings until mid-January.
“Our customer is prepared to pay these crazy prices, but we are still really struggling to get boxes away as the ports are all jammed up. We have had some boxes sitting on the quay for over four weeks now, and we still don’t know when they will get loaded,” he said.
Meanwhile, the empty equipment so desperately needed back in Asia is scattered around depots across Europe, particularly in the UK, where embattled ports have been forced to limit the restoration of containers back onto already overcrowded terminals.
Meanwhile, a survey by Container xChange, in association with German maritime research consultant FraunhoferCML, suggests that despite technological advances, containers still spend a surprisingly long time empty at depots, incurring storage costs and not earning revenue.
“All containers are very much in need; they still spend on average 45 days empty at depots,” says the report, which surprisingly suggests that areas which suffer from shortages have higher dwell times.
“Especially in regions with low container availability such as China and the US, the average is comparably high, with 61 and 66 days respectively, compared with the global average of 45 days,” notes the report.
Comment on this article
Cj
December 01, 2020 at 4:45 pmAll your empty boxes are Nigeria abandoned by shipping company in order to be making more money from dumurrage on the boxes.
Yannick Raisin
December 01, 2020 at 5:17 pmInteresting Question in the header, unfortunately no answer to the question in the article…
Yoshan Perera
December 02, 2020 at 8:35 amMost containers are stuck in USA inland yards, buyers, and ICDs. Due to covid, there is a lack of chassis operators in USA. hence all empties are stucked in the middle of the country and it takes around two weeks to return to the port. So equipment flow from West to East has been effected,
Yoshan Perera
December 02, 2020 at 8:36 amMost containers are stuck in USA inland yards, buyers, and ICDs. Due to covid, there is a lack of chassis operators in USA. hence all empties are stuck in the middle of the country and it takes around two weeks to return to the port. So equipment flow from West to East has been effected,
Coskun Bademsoy
December 03, 2020 at 7:52 pmYoshan,
The lack of chassis in the USA is a problem over a year now. Why dont they unload the containers at arrival into a tilt trailer? We do that in turkey with the most of the imported containers. Only the obes which are high value or high sensitive move in containers but all others move in tilt/tarpaulin trucks.
Stephen Martinek
December 11, 2020 at 4:34 pmHello Coskun,
Most 40’s are railed to points inland. The containers aren’t unloaded at the ports, they are stacked onto multimodal rail. The chassis shortage is a problem on the pickup/delivery side. Empties sit at inland rail ports, because there are insufficient chassis to dray them to warehouses for loading.
Chassis operations are not terribly profitable, and the major pool operators aren’t terribly interested in making the kind of capital expenditure required to beef up their numbers.
Si
December 02, 2020 at 10:09 amin the last paragraph, why boxes need a such long time at depots in China? as i know the covid-19 is not threatening that country now and they have much goods to export.
Nc
December 03, 2020 at 5:53 amThey are now tiny houses
Coskun Bademsoy
December 03, 2020 at 7:43 pmOne of the reasons why shortages of containers happend was lockdown of factories who stopped their production and didnt cleared their imports.
The shipping lines should take serious steps in order to empty their containers at destination. First step could be eliminating long freetimes on demurrage and increasing daily demurrage enormous so that cnee’s immediately empty the containers!
Thats better than increasing the freight upto 300 %!!
We as a forwarder would support such steps.
Ibrahim ahmed zahedi
December 11, 2020 at 8:56 amGreat news and we hope to get regular updates from you!
Mick
December 23, 2020 at 4:32 pmWe was paying 3700$ for shipping now they want over 12000$ crazy people won’t pay we have goods that cannot be shipped
D. J. Noone
January 05, 2021 at 3:29 amMight sound, daft but why can someone send a massive empty vessel to pick up the empty 40′ boxes as I work out of Southampton docks and thay are masses of emptys stacked everywhere
anthony
January 05, 2021 at 7:20 amOver the last year I have noticed growing stacks of containers at existing private stockyards in addition to several new locations in my area with hundreds if not thousands of containers.