• Industry looking for more diverse sourcing, holding more inventory & entering into long term contracts in 2022
  • Finding slots on vessel and surcharges by carriers emerge as top challenges
  • Industry moves to one-way leasing as an alternative to getting equipment from carriers

Hamburg, December 2021: A global survey published by Container xChange today shows that majority of the container logistics industry (75%) is rethinking its logistics strategy in the next year. The survey results indicate that the industry is expecting gloomy times for the container logistics industry. The top challenges for the industry remained finding spot on the vessel and surcharges by carriers. One-way leasing emerged as the most sought-after alternative as compared to getting equipment from the carriers.

Container xChange, world’s leading container trading and leasing tech company released the results of the xChange industry speak survey 2021-22. The survey was released to 800 container logistics players globally including shipping lines, container traders, freight forwarding companies, NVOCCs, shippers and procurement companies. The objective of the survey was to study the industry sentiment, key learnings from the year 2021 and outlook for the year 2022 from the players.

Key findings from the xChange Industry Speak Survey 2021-22

  • The industry is downbeat about the supply chain performance in 2022. Out of the total respondents, 65% said that the performance will either deteriorate further (11%) or seem to remain the same (54%) in the year 2022.
  • The top challenge that the respondents experienced to conduct business was finding slots on the vessel (53%), followed by surcharges by the carriers (22%) and labor shortage (19%). The remaining respondents (6%) highlighted the challenge of lack of transparency and visibility into the supply chain.
  • When asked what alternatives compared to getting equipment from carriers attracted them, 50% of respondents said they resorted to one-way leasing followed by long term leasing contracts (28%) and buying containers (22%).
  • Overall, 71% of respondents said they were rethinking their logistics strategy and they are looking for more diverse sourcing and are resorting to holding more inventory. 71% said they will go for more diverse sourcing, 43% said they will go for holding more inventory, 21% said – Entering into long-term contracts with carriers and avoiding the spot market and Shorter supply chains
  • The main causes of container shortage this year, according to the respondents, were –shippers using boxes as storage (42%), container line failures (28%), inefficiencies in matching box owners to potential users (28%), and longer transit times and port congestions that made container rotation slower. {The question was a multiple-choice question and hence will not add up to 100% when adding up the percentages)
  • When asked ‘who emerged as the biggest winner of the global supply chain crisis’, the industry unanimously echoed the opinion that container lines (64%) were benefitted the most out of the disruptions followed by shippers (21%) and freight forwarders (15%)
  • 75% of respondents said that COVID-19 impacted their Business. Out of these 75% respondents, 54% said the pandemic resulted in lower profit margins, 36% said it resulted into less transparency and 36% said they resorted to more digital solutions during these tough times.

Just when the year 2021 saw a slight recovery from the pandemic, the new variant made a dramatic entry and shook the industry once again. Foreseeing the market in 2022, and what it holds for the logistics business, Christian Roeloffs, Cofounder and CEO, Container xChange, says,

“We foresee that COVID-19 and its new variants will continue to disrupt the port operations and labor capacity as we progress into the year 2022. Persistent unpredictability is warranted. We’ve also started to observe container prices and leasing rates going down. Once prices slide significantly, they risk crashing. If we look at the current demand, we see that the demand for containers hasn’t increased significantly.”

“The current spike in rates is caused by a temporary supply crunch. But with disruptions such as labor union conflicts at US ports easing up, we’ll also see the capacity challenge improving. However, the “return to normal” seems to be coming earlier than many of us first anticipated – and it might be as early as the second half of 2022,” he adds.

Sharing his expectations from the year 2022, Johannes Schlingmeier, Co-founder and CEO, Container xChange said, “2021 was an outstanding year for the shipping industry. The staggering earnings and profits for ocean freight companies have surpassed the combined industry profits made over the whole decade. It was also a year that showed that shippers were “willing” to pay higher prices for shipping.”

He adds, “Now, those earnings and profits will need to prove that this money can be put to good use to improve service levels across the industry. This has to go beyond the traditional levers of investing in more container capacity – but also into landside infrastructure, inland transportation and infrastructure for cross-industry collaboration to build resilience for the industry.”

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Ritika Kapoor, [email protected]
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