Empty Containers pile up at Global Ports as trade slows

SHANGHAI : Empty containers are piling up at major ports around the world as slowing economies weigh on shipping demand.

In the week of Feb. 5, the CAx (Container Availability Index) rose to 0.64, according to container monitoring platform Container xChange. It was the 11th consecutive week the index was above 0.6. CAx values above 0.5 mean that more containers enteredaportthanleftit.

The CAx compares the number of full containers that were importedwiththenumberexported.ACAxvalueof0.5meansthat the same number of containers leave and enter a port in the same week.

The docks in Shanghai port are filled with empty containers, and many must be moved to nearby Taicang port, a dock operator at Shanghai was quoted as saying recently. “We haven’t seen suchasceneforyears,” hesaid.

During COVID-related lockdowns early last year, containers piled up on the docks and caused months of backlog in Shanghai,theworld’sbiggest containerport.

In recent months at export hubs including Shanghai and Qingdao, the CAx readings for 40-foot containers have held in the range of 0.6 to 0.7, while the indexes at the major import hubs of Antwerp in Belgium and Los Angeles in North America have been above 0.8, said Xu Kai, chief information officer of the Shanghai InternationalShippingInstitute.

Since the fourth quarter of 2022, the return flow of empty containers has been generally higher than the export volume of filled containers, leading to widespread pressure on empty container stockpiles at China’s major ports, a large freight forwardertoldtheaChinesemedia.

Idle containers globally account for about 6% of total capacity, and some idle ships are also filled with empty containers, the freightforwardersaid.

A.P. Moller-Maersk A/S, which handles about one-sixth of the world’s containers, said last week that 2023 demand in the container shipping industry is set to fall as much as 2.5% but may rise0.5%.

The Copenhagen-based container giant said the company turned some idle medium-size container vessels into floating empty container platforms, which can be used to store empty containers to reduce costs and facilitate the transfer of empty containersbetweenports.

An oversupply of containers also contributed to the pileup of empty containers at ports. In 2021, ocean carriers ordered a record number of containers while retiring fewer aging units. The global stock of shipping containers increased by 13% to almost 50 million twenty-foot equivalent units (TEUs) in 2021. That was three times the previous growth trend, according to maritime researchconsultancyDrewry.

Drewry estimated that as many as 6 million TEUs of surplus containersnowexistintheglobalequipmentpool.

Shipping consultancy Clarkson projected that container shipping volume will total 201 million TEUs in 2023, down 3.1% fromlastyear.

As shipping demand slows, freight prices have also declined. Since the second half of 2022, the Shanghai Export Container Freight Index, which reflects spot market rates, fell by about 80%. On Friday, the spot shipping rate for a 20-foot container from Shanghai to Europe fell to $925, down 88% from the 2022 high, while the rate for a 40-foot container from Shanghai to the U.S. West Coast fell to $1,293, down 84% from the 2022 high, data from ShanghaiShippingExchangeshowed.

Generally, the container shipping market gradually rebounds 45daysafterLunarNewYear,whichfellinlateJanuarythisyear,a senior freight forwarder told. But this year the recovery may take atleast60days,hesaid.