Container prices fell in March 2023 due to sluggish consumer demand and excess inventory in Asia, online container logistics company Container xChange said in a market forecaster report.
Singapore and China saw container prices plunge by 55 percent and 47 percent year-on-year (YoY) to $1,951 and $2,284, respectively, in March 2023.
Ports in Vietnam, India, Thailand, Malaysia and Indonesia reported 51 percent, 50 percent, 46 percent, 42 percent and 40 percent declined YoY in March 2023.
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“In major ports across Asia, such as Ningbo, Shanghai, and Singapore, the cost of leasing and purchasing containers dropped sharply over the past year. This means that container companies are struggling to make money and that the current situation may persist for a while,” the report said.
Christain Roeloffs, CEO & Co-Founder, Container xChange, said that the uncertainty around inventory restocking in the first half of 2023 has been exacerbated by the highly uncertain consumer demand side of the picture, with the potential impact of a possible recession on consumer spending in the US and European Union region.
“This, in turn, signals a grim outlook for the revival of container prices any time soon,” he added.
As part of a China plus one strategy, businesses are currently assessing and launching projects to test the waters by entering new countries to meet their supply chain demands.
Roeloffs noted that the strong economic partnership between Southeast Asia and China could provide a much-needed stimulus to the world economy.
“This year, shipping and port firms are considering proposals to establish additional tailor-made sea transportation routes, with Southeast Asia being a key area of interest. The cooperation between these regions could give a boost to the overall ramifications of the global supply chain.”
Pickup charges from China to Southeast Asia saw a major slump of 84 percent from $559 in January 2023 to $91 in March 2023.
“This is an evident indicator of increased intra-Asia trade,” the company stated.
Source: Reuters (Writing by P Deol; Editing by Anoop Menon)