Five Factors That Affect Shipping Container Prices

It is a well-known fact that around 80 % of global trade takes place through the maritime route. This highlights the importance of maritime transport and the shipping industry to maintain the vitality of the global economy. There are a number of internal and external factors that decide the healthy function of maritime logistics and its price. Maritime Shipping containers are one such important internal factor that can impact the freight price or translate to supply chain disturbance.

It is to be taken into account that since May 2021 global cargo containers price has increased by 60%, significantly impacting shipping logistic prices. Countries around the world are regulating container exports and imports to ease the situation.

Let us know five reasons behind the rising cargo box cost:

Global Pandemic adding sky-high containers price

The global pandemic has impacted the price of freight units in two ways. During the global lockdown, many countries closed their ports as a result empty containers were also stuck in those areas. At a time, when trade was returning to normal, repositioning those empty boxes was slow and costly. This also added up shipping units’ prices to a certain extent.

Contrary to the popular belief, barring the initial shock, international trade picked pace quickly and rapidly. Covid saw unusual customer behavior which resulted in a shift in demand from services to manufactured goods by several times. Freight logistic suppliers were unable to channel the demand in a proper way. As a result, there were unprecedented container shortages and rising container prices.

Port Congestion

Port Congestion is a particularly pressing problem that has a visible and costly impact on container prices globally. Since 2020 port congestion has been rising sharply, clogging global containership capacity to a great extent. As a reason there is a long queue in ports globally which has blocked the healthy supply of containers, taking up container prices to a steep edge. 

Countries around the world are bringing new regulations to keep the container supply flowing and container prices within the reasonable bracket. 

Voyage Delay & Long Routes

In recent times, port congestion and increased numbers of ships in the sea have seen significant voyage delays that have added more time to the proforma schedule. If cargo ships get delayed that means metal shipping containers get stuck in transport. This factor often sees container shortages and container price hikes harming the interests of traders worldwide.

Peak Shipping Seasons

Peak seasons like Chinese New Year or Christmas that fall between July to November/December are some of the reasons that add up to container shortages and significant price hikes. In peak season traders rush to get their supply to their customers, as a result, there are always container shortages around these times. The retailer also gears up their inventory backup that hypes the demand for raw materials by manufacturers adding more import demands and container clogging by shipping logistics. By default, container shortage increases container prices by a few notches.

Increased Numbers of Ships and Small Vessel in the Sea

In recent times as the world resumes its activities to full swing, consumer demands pick up pace and manufacturers are rushing to fulfill that demand. This saw an increased number of ship deployments from ports all over the world. According to Sea-Intelligence, a Danish supply chain research company, the number of ships and small vessels grew rapidly in recent times hogging up the container supply. They predict that there will be a 40% increase in ship deployment and a 60% increase in the number of vessels in the next two months.

This projects a shortage of containers and a container price rise by experts. Although countries around the world are trying to regulate container shortages, it is expected to take time to see results. As the world continues with intermittent lockdowns that greatly impact intermodal transportation. This affects the proper channelization of containers to their desired destination, container shortage, and the resulting price hike is not going to see relief in the coming months.