Chennai was the most expensive location to buy used boxes in March, says Container xChange
Container shortages, which have been adding to logistics logjams in Asia and beyond, are showing few signs of being resolved, according to the latest data from Container xChange, a global online platform for the leasing and trading of shipping containers.
The latest Container Availability Index (CAx) data of Hamburg-based Container xChange also reveals that equipment shortages are driving up container prices at major Indian ports. Between June 2020 and March 2021, the average used 20-foot container prices across the ports of Chennai, Mundra and Nhava Sheva rose 58 per cent to $1,755 from $1,106.
Chennai was the most expensive port to buy used containers in March 2021, with an average price of $2,220 per 20-foot container. Average prices in March at Nhava Sheva were $1,667 per 20-foot container.
Mundra was the cheapest location in India to procure a used box with an average price of $1,455.
“The relentless pace of container shipping trade since the summer of 2020 is not easing, and this is reflected in equipment shortages in Asia and elsewhere,” said Dr Johannes Schlingmeier, CEO and Founder of Container xChange.
“We expect markets will tighten even further in the coming weeks as the ripple effect of the Suez Canal closure at the end of March further disrupts container shipping services and equipment availability,” he added.
“It always depends on the exact equipment type, but before shortages became critical, a standard used container, which was a few years old, would cost around $1,000 in China, while a brand-new container would be about double the price,” said Schlingmeier.
“However, in the current market, used containers are selling at $2,300-$2,600 across China, while the prices for brand-new containers at Shanghai, for example, have skyrocketed by 64 per cent in 2021 to an average of $3,390,” he said.
In China, the average prices for used twenty-foot containers increased 94 per cent between November 2020 and March 2021. The surge from an average price of $1,299 per box in November last year to $2,521 in March indicates that container scarcity is continuing to worsen.
“Up to the third quarter of calendar year 2021, there is going to be no let-up in the prices of containers,” said Bijoy Paulose, Managing Director at Chennai-based VS&B Containers Pvt Ltd, the largest container trader in India and West Asia.
Paulose, who has spent some 35 years in the container industry, said that he has never seen prices for new 20-foot boxes touch $3,500. The average price for a new box has hovered in the range of $2,000-2,400, he said.
‘A global issue’
Terming the container shortage as a “global issue”, Paulose said the problem has been aggravated by the grounding of a container ship in the Suez Canal for close to a week in March.
“The Suez Canal incident has further skewed supply chain. Ships have got delayed and there is a big scramble to get space at ports in Europe to discharge containers, creating a huge backlog of boxes and adding to the equipment imbalance. I can’t see a solution for this up until the fourth quarter of CY2021,” he added.
Source: The Hindu Businessline