China's Container Availability and Prices are Improving for Exporters
After months of crippling shortages, container availability and pricing is finally improving in China, according to Container xChange’s Container Availability Index (CAx). The index draws from data on the container leasing and trading platform Container xChange to track the availability of containers in major seaports.
The CAx reading of incoming containers across China's main ports is currently up 56 percent according to Container xChange when compared to before the Chinese New Year holidays that started on February 11. While the slowdown in factory production normally associated with the holiday period was reduced this versus normal levels, they believe that it was still enough to allow the container supply/demand imbalance to be reduced. At the same time, the major carriers have been working to aggressively return containers to reduce the shortages experienced in late 2020 and earlier in 2021.
At Shanghai, the biggest Chinese box port, the CAx increased 64 percent for 20-foot dry containers when comparing the pre- and post-holiday container availability. For 40-foot dry containers, the increase is even greater, with box availability improving 112 percent over the same period.
“One week of index values greater than 0.5 does not mean so much but exceeding the 0.5 marks for several weeks in a row like Shanghai and other main ports in China have done means that finally more containers are entering ports regularly, giving them the chance to reduce the container supply/demand imbalance,” said Dr. Johannes Schlingmeier, CEO & Founder of Container xChange.
The Container xChange Container Availability Index is also highlighting that other Chinese ports such as Qingdao, Dalian, and Ningbo are strong alternatives to Shanghai for exporters who have been struggling with finding the right equipment.
Dalian has the highest equipment availability of the three ports with further improvements after the holiday period. Container availability also improved in the same period at Qingdao. These improvements in availability also contributed to declines in the cost for used containers from the record highs reported in January 2021. According to Container xChange prices for cargo-worthy containers declined by a third between January and February falling to $3,750 in February.
“These prices are still far higher than buyers usually pay for newly built containers, but this is still good news for companies who export from China,” said Schlingmeier.
While Container xChange believes these developments are a positive sign highlighting the improvements at key export hubs in China, they are forecasting continued volatility for container availability both in China and elsewhere in 2021.