China’s shipping container congestion said to reflect repositioning back to Asia
- Increase in container prices, while small, bodes well for the shipping industry, according to monthly report by Container xChange
- More inbound containers than outbound in January also attributed to factory closures amid coronavirus spread and Lunar New Year holiday
An uptick in the prices and leasing rates of second-hand containers in China last month reflects how container traders and operators are expecting a resurgence in demand following China’s reopening, according to a new report.
“The rebound of trade in China, and hence the container-trade rebound, will depend on the pace of the reopening in China – that is, how quickly production volumes return to normal there,” said Christian Roeloffs, co-founder and CEO of Container xChange.
The monthly analysis by Container xChange – an online platform for container logistics – also found that ports in China were more congested in January than they were in the last three years, meaning there were more inbound containers and few outbound containers.
This repositioning of containers back to Asia from the US and Europe also reflects the clearance strategy by importers after the peak season. Container congestion is also in line with the situation in China, as factories were closed last month – due to both the spread of Covid-19 and the Lunar New Year holiday – and there were labour shortages.
In December, China’s exports marked their third consecutive month of decline while also recording the largest year-on-year drop since the onset of the pandemic in early 2020. Analysts predicted that the contraction would continue in the coming months, citing weakened international demand for Chinese goods.