The shipping industry is facing a new problem: there are too many containers to fit...
In addition to the drop in freight rates, data shows that container warehouses (where containers are stored after unloading) are now full of empty containers.
It was yet another example of falling consumer demand and a slowing economy around the world.
Traders and shippers pointed out that this is not a sign that the global economy is returning to normal, but a sign of declining consumer demand.
“There is not enough warehouse space for all the containers,” Christian Roeloffs, chief executive of Container xChange, an online container logistics platform, said this week. He also warned that container warehouses would face greater storage pressure in the coming months.
New customer needs can no longer be met
Andrea Monti, chief executive of Italian container leasing company Sogese, told Container xChange that his warehouses are full and unable to accommodate new customers in certain areas.
"For example, our warehouse in Milan is very crowded. And the number of containers is still increasing, so that we are rejecting some warehouse service requests." He said. "We're in a situation right now where there are some areas that can't accept new customers."
Monti told Container xChange that when Christmas approaches, there is usually a peak in cargo shipments, but strictly speaking, there is no such thing this year.
He noted that retailers are wary of the high inventory levels they have on hand. Delivery of goods has become on-time again, which has also contributed to a slowdown in new orders.
In response to the problem of stockpiled warehouses, ports such as the Port of Houston have begun charging for empty containers sitting at the terminal for more than seven days, according to Darin Miller, national maritime manager at Sedgwick, a global claims management services provider.
The latest Drewry World Container Composite Index - a key benchmark for container prices - has fallen to ,773 per 40ft container, down 73% from its September peak last year.
Increase in airline or canceled voyages
Another anomaly is the rise in airline or canceled flights as the biggest shopping season of the year looms. This also reflects the decline in demand in the sea freight market.
Airline means that the liner company enters and leaves the port normally according to the plan, but the ship does not load any cargo when it calls at the port, that is, the original route is transported with an empty ship, or the shipping company will choose to cancel the scheduled port of a certain route or cancel this route. The original sailing plan of a route.
In its latest analysis, Drewry said 14% of voyages on major container routes were canceled between late November and early December.
Last week, shipping giant Maersk warned in its third-quarter results that freight rates had peaked amid easing supply chain woes and falling demand. The company told investors it expects lower margins in ocean shipping.
Nearly 60% of 200 freight forwarders, traders and shippers surveyed by Container xChange in a survey last month said they were dealing with geopolitical, economic and political risks that were causing downside to consumption Pressure, which in turn leads to a decline in container demand.
