Global container flows are collapsing as warehouses are already full of goods

As brands and retailers stockpile vast inventories, demand for retail orders, shipping containers and ship crossings has all fallen, according to a Market Forecaster report from logistics technology provider Container xChange.

And with containers no longer in hot demand, storage depots will suffer the brunt of a container surplus well into 2023, before demand eventually recovers over the long term, the German company said. Meanwhile, container owners are likely to face hikes in container storage fees to prevent longer stays in the overcrowded depots, Container xChange warns.

“There simply isn’t enough depot space to accommodate all the containers,” said Christian Roeloffs, co-founder and CEO of Container xChange, in a press release. “With the further release of container inventories onto the market (e.g. from the sale of leased fleets), the pressure on the depots will continue to increase in the coming months. This will be a major challenge for some and a competitive advantage for others in the industry, particularly in China due to the repositioning of empty containers there.”

One of the factors complicating these market conditions is the flattening curve of the 2022 peak season as orders have been spread over an increasing number of shopping weeks. This novel post-pandemic pattern has made retailers and companies more cautious in their inventory management strategy as they adapt to the shorter cargo delivery cycle, said Johannes Schlingmeier, co-founder and CEO of Container xChange, in a press release.

“There are enough stocks at the dealers,” said Schlingmeier. “Once these stocks are depleted in North America and Europe, companies will start ordering again and demand for shipping capacity will increase again. This will not go back to the peak pandemic level, but certainly will go back to the long-term average uptrend. What has happened now is that cargo is “on time” again and therefore you will see a slowdown in new orders as companies adjust to these more efficient turnaround times in ocean freight delivery.”

The Container xChange report was supported by other statistics from across the logistics industry, including the Port of Savannah, which said a shift in consumer spending and inflationary pressures are expected to dampen demand for port services in the coming months. This “correction in the market” threw the facility’s container volumes down a notch in September, falling 7.6 percent from the same month last year.

Likewise, the Port of Oakland announced that its total loaded container volume decreased by 7.9% in September compared to September 2021, due to causes such as longer import hold times leading to port congestion, ongoing bottlenecks in the US West Coast supply chain and a lack of capacity suggests demand in the region’s warehouses.

And more broadly, the National Retail Federation said last week imports at the country’s major container ports are likely to slow further from records set earlier in the year as retailers worry about port congestion, port and railroad labor negotiations and other supply chain issues were already covered long before the holidays.

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