While there was a shortage of containers at the height of the Covid pandemic, the global economy is now facing the opposite problem, too many containers.
“There is just not enough depot space to accommodate all the containers. With the further release of container inventory into the market, for example from the disposal of leasing fleets, there will be added pressure on depots in the coming months. This will be a key challenge for some and a competitive advantage for others in the business, especially in China because of the empty container repositioning there”, inferred Christian Roeloffs, cofounder and CEO, of the online container logistics platform Container xChange.
As it is mentioned by Container xChange, this peak season, which has technically not happened this year, retailers and companies are more cautious in their stock management strategy as they adjust to the shorter cargo delivery cycle.
Talking about the impact of hinterland disruptions and de-fleeting of shipping lines in the coming times, Andrea Monti, CEO at Sogese who also owns container depots in different locations in Europe commented during the Digital Container Summit in October, “Whatever was coming in and out of, for instance, our Milan depot is quite stuck. And the container volume at the depots is increasing to an extent that we are returning some requests for depot service agreements. We are in a situation where we are not able to accept new clients for some locations.”
“There is enough inventory with retailers. Once these inventories exhaust in North America and Europe, companies will order again, and demand for shipping capacity will pop back up. This won’t go back to max pandemic levels but certainly, be back to the long-term average upward trend. What has happened now is that the cargo is “on time” again and hence you’ll see a slowdown in new ordering as companies adjust to this more efficient turnaround times in ocean freight delivery.”
“For container owners, this could potentially mean a rise in container storage fee by depots as more containers pile up to disincentivise longer staying containers at the depots,” said Dr. Johannes Schlingmeier, cofounder and CEO, of Container xChange.
Source: Container xChange