Shipping and container costing experts are predicting a bullwhip effect in the industry in 2023 where, far from the spiked prices of 2021 and 2022, the prices are predicted to plummet “down to almost variable costs.”
Container Xchange Co-Founder and CEO Christian Roeloffs wrote this week “In 2023, there is a high possibility of an all-out price war. It doesn’t seem that the capacity restrictions that we have seen in the past two years are due to return, so we’ll just have ample capacity both on the vessel as well as on the container side. With the competitive dynamics in the container shipping and liner industry, I don’t expect especially the big players to hold back, and we do expect prices to come down to almost variable costs. We also foresee market consolidation.”
There are already reports that some logistics giants are teetering on the brink. China United Lines, an emerging business handling transpacific and Asia to Europe trade is one such business said to be at risk of default.
The tight capacity of 2022 and subsequent hike in rates has now largely disappeared, as this Drewry live chart illustrates. Far off the near $10,000 rate for a 40ft container in January, today the price is hovering closer to $2,200.
As with product, there now exists and oversupply of containers as the supply chain grapples with having delivered, but not sold through a glut of stock.
Shipping lines continue to reduce vessel capacity and suspend services by considerable blank sailings. In a recent […]
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