Exacerbated by ongoing supply chain disruptions, port congestion along the East and West Coasts is driving the price of shipping containers downward, a trend that is expected to last for the next few weeks, according to research from Germany-based technology firm Container XChange, which tracks container movement trends worldwide.
Empty containers are piling up in depots at ports along both coasts due to persistent supply chain delays and bottlenecks over the past two years. The most recent snags are being driven by the Russia-Ukraine crisis and Covid-19-related lockdowns in China that have stalled supply lines. These pressures will continue to drive down container costs in the short- and mid-term, according to Container XChange analysis, which shows that U.S. container prices have declined as much as 30% in the past two months along both coasts, and by as much as 50% at some ports compared to 2021.
Some large carriers are shipping empty containers back to Asia to increase profitability and ensure that the high-value cargo in the East makes its way to U.S. shores, where the demand is, according to the report. Such trends may continue as containers pile up.
“Carriers and other container owners will be getting desperate to get rid of those units,” Christian Roeloffs, co-founder and CEO of Container xChange, said in a statement Tuesday. “As more and more containers will be required to be stored in depots in the U.S. and because the depot space is limited, there will be a massive downward push on container prices in the immediate short to mid-term.”
The average container price for 40 ft high cube (HC) containers at the port of Los Angeles have dropped by 20% since late February—from $3,467 to $2,754 in April—and they are expected to fall further in the next few weeks, according to the data. The average price for a 20-foot container at the port of Los Angeles was $1,661 as of April 11, according to the research—nearly half what they were at the end of last August.
“It does seem that the China lockdowns have impacted the U.S. logjam positively in the short term. But there will be a lot of disruptions when the lockdowns are lifted, and vessels will storm the East as well as the West Coast ports,” Roeloffs said. “There will be an added element of panic shipping. This will further increase supply chain pressures and logjams in the US.”