Container xChange Predicts Container Price Bubble Will Burst in H2 2024
Container xChange, a leading player in the global container shipping market, released its June market forecaster report, showing a significant 45% surge in container prices in China in May, while prices in the US and Europe remained stable.
Despite the recent price inflation, Container xChange’s analysis suggests a potential market correction, predicting the price bubble will burst in the second half of 2024. The report argues that the current price increase, driven primarily by capacity shortages and an unexpected demand increase, lacks support from robust underlying demand, while high-interest rates and labor market concerns are expected to curb consumer spending, potentially leading to a decline in shipping volumes.
“Shippers are advancing shipment dates, causing a temporary demand surge for shipping capacity. This has led to increased throughput volumes, despite weak underlying consumer demand and factory orders,” said Christian Roeloffs, Container xChange’s co-founder and CEO.
He pointed out that consumer spending in the U.S. increased by a mere 2% in the first quarter of 2024, the lowest increase in three quarters. Also, retail inventories excluding autos in the U.S. rose by only 0.3% month-over-month in April 2024, implying cautious restocking by retailers.
“Given these factors, we expect that the elevated container prices we’ve seen in recent months may not be sustainable,” said Roeloffs. “As the initial rush to restock inventories subsides and the real demand from consumers and businesses remains flat, we anticipate a stabilization or even a decline in container prices in the mid-term. The market is showing signs of volatility driven by short-term factors, rather than a sustained increase in demand.”
The report also emphasizes that the majority of container logistics professionals surveyed in May, as part of the Container Price Sentiment Index (xCPSI), anticipate further container price increases in the upcoming weeks.
Source: Article
Related posts
Descartes Report Shows Robust Port and Imports Activity in May
Another month brought another strong month of United States-based imports, accor
Intra-Asia Services Struggle as Smaller Ships Diverted to Long-Hauls
The cascading of smaller box ships to more-lucrative long-haul lanes has created
Maximizing Efficiency and Cost Savings with a 4PL Strategy
In today’s fast-paced business environment, companies are looking for inno
