The container market now has a surplus of 6 million TEUs globally. While this overcapacity has caused some disruptions, there’s a silver lining. Read this blog to know all about the causes, effects and why it’s the right time to buy containers in 2023.
Around 90% of global trade is carried out via the ocean. In order for the global supply chain to function properly, the supply of containers must meet the demand. However, the container market has seen container imbalance for a few years now. Earlier, during the pandemic there was a shortage of containers and now there’s a surplus.
The slowing down of demand and the oversupply of containers are both consequences of the disruptions caused by the Covid-19 pandemic. It’s an example of the classic boom and bust cycle.
With the surplus of shipping containers, the container prices have decreased significantly across the globe. This is because the supply of containers is much more than the current demand.
But there has never been a better time to invest in shipping containers than now. The prices are low and containers are easily available. On the Container xChange trading platform, we have 50,000+ containers available in 2500+ locations globally, all from vetted suppliers.
Want to check out the prices and availability of containers in your location? Simply use the public search below, fill in your container requirements and location and browse through multiple offers from vetted sellers.
Why is there a surplus of shipping containers in 2024?
Currently, there’s a surplus of 6 million TEUs globally. However, it wasn’t always the case. In fact, during the Covid-19 pandemic in 2020-21, the shipping industry was facing the opposite problem: Container shortage.
To understand this shift from container shortage to oversupply, let’s briefly summarize what happened between 2020 to 2023.
The shortage of containers got worse during the pandemic when there was a worldwide lockdown. Empty containers were not picked up due to labor shortages and trade slowdown. This led to port congestion. With empties not returning in time, there was a scarcity of containers at other ports. Moreover, with fewer shipping vessels operating, the container imbalance increased further.
To meet the demand on high volume trade routes, shipping lines tried to curb this shortage by adding new containers. As a result, a large container orderbook has built up over the last two years.
And now, there’s a surplus of containers! Here are a few factors that led to container surplus.
– Decrease in consumer demand: The market is bearish in consumer demand due to multiple factors like recessionary fears and inflationary risks. Plus, with political developments like the Russia-Ukraine war, the commodity markets are in turmoil. All these factors have led to a significant dent in consumer demand, leading to less demand for freight and cargo – and ultimately containers.
– Low order-to-inventory ratio: Another factor is the low order-to-inventory ratio. This ratio indicates the number of times a company has sold and replenished its inventory over a specific amount of time. A low order-to-inventory is a sign of weak sales. Since there is a decrease in consumer demand, businesses are ordering less goods. As a result, the containers used to transport the goods are not being used, creating an increased supply of containers.
– Congestion easing on the supply side: And finally, due to less demand and low order-to-inventory ratio, most ports are working at less capacity thereby increasing their efficiency. The turnaround time for containers has also reduced – increasing the overall supply of containers in the market.
The surplus of shipping containers has multiple effects on the container and shipping market. Read on to learn more about the effects.
Impact of surplus shipping containers on the market
Here are some of the effects of surplus shipping containers on the market.
Congestion at container depots and ports
Excess of shipping containers has led to congestion at container depots and ports across the globe. Empty containers have piled up at the depots of the US, Europe and China.
According to our April-edition of “Where are all the containers” report, depots in China are reportedly working on 90% utilization. An oversupply of containers also makes it harder for the depots to move boxes. And because depots make money by moving these boxes as opposed to storing them, the current circumstances are making the depots inefficient in both their operations as well as revenue generation.
Container xChange CEO and co-founder Christian Roeloffs said, “There is just not enough depot space to accommodate all the containers. With further release of container inventory into the market (e.g., from the disposal of leasing fleets), there will be added pressure on the depots in the coming months.”
Similarly, there’s also a surplus of containers at ports across the globe. Take a look at the graph that we’ve gathered from our Container Availability Index (CAx).
With CAx, you can check container availability in major ports worldwide. CAx values above 0.5 mean that more containers with cargo enter and CAx values below 0.5 mean more containers with cargo leave a specific port. High CAx values over a time period of multiple weeks indicate a surplus of equipment at a specific port.
As you can see from the graph above, CAx values of ports in Hamburg, Shanghai & Mundra are well above 0.5. This means that more containers are entering all these ports than moving out – indicating container surplus at ports.
Increased blanked sailings
With the drop in cargo demand, ocean freight rates have fallen too. This has also brought significant changes in how the global container fleet moves. Many sailings and services have been canceled or suspended on the Asia-North America and Asia-Europe routes. Amidst this, one region is emerging as commercially attractive: the Indian sub-continent and the Middle East. You can read more about it in our latest report where we cover the current happening of the shipping industry in detail.
Decrease in container prices
With an increase in supply of containers and a decrease in demand, container prices have decreased significantly. We’ll discuss more about container prices in the next section.
However, if you’ve thought about investing in shipping containers, now is a great time to do so – with container prices being record low. And what other place to buy containers from than Container xChange?
On our platform, you can find 50,000+ containers in 2500+ locations globally from vetted suppliers. You can browse through multiple deals and choose the best offers. Plus, you can negotiate directly with the seller on the platform itself to buy containers at best prices. Simply click the banner below to get started.
See the best prices to buy and sell shipping containers
Container prices change constantly and depend on a variety of factors as we’ve already seen. To make sure you buy containers at the best prices, you need to be aware of the current market prices.
One easy way to access real-time container prices is through xChange Insights. On Insights, you can access container prices in 110+ locations globally.
From the graph above, you can see the container price development through 2022 in major cities across the globe. The graph highlights how container prices have decreased due to a surplus of containers in the market – making it a perfect time to invest in shipping containers.
With Insights, you can access container prices in different locations allowing you to enter new markets easily. Insights allows you to make better container deals by increasing your negotiation power and providing you with a competitive advantage.
You can significantly increase your business’s profit margins by being aware of the current container prices and market trends. Want to know more about Insights and how it can benefit your business? Click the banner below and try Insights for free today!
Buy shipping containers at best prices on Container xChange
Now that you know how you can access real-time container prices, it’s time to see how you can use our trading platform to buy containers.
On our Container xChange trading platform, you can connect with 1500+ vetted members to buy, sell and lease containers in 2500+ locations globally. Once you fill in your container requirements on our platform, you’ll get multiple offers to choose from.
Using Insights, you can analyze the best prices and locations to buy containers from. Then you can directly connect with the sellers to negotiate better deals. We don’t charge any commission on your deals. With 100% market transparency and 0% commission, you’re bound to get the best container deals on xChange.
To provide additional safety to our members, we’ve also developed the xChange wallet. This ensures all your transactions are running smoothly and that your money is safe and secure on the platform.
Container xChange is the all-in-one platform you’ve been waiting for all your shipping needs. So why look somewhere else? Just click the banner below to get the best prices for containers in your desired location.
Surplus shipping containers: Common FAQs
Is it a good time to buy shipping containers?
Yes, it's a good time to buy shipping containers because there's currently a surplus of shipping containers in the market.
How does container supply affect container prices?
The price of containers decreases when the supply of container increases. On the other hand, if the supply decreases, the container price increases.
What is the price of 40ft container?
The average price of a cargo-worthy 40ft container is anywhere between $1500 to $2500. It depends on the container supply and condition of the container.