Business, Freight News, Logistics, Sea

Container industry wary of 2022 – but rates could tumble

[ December 8, 2021   //   ]

Global container logistics players wary of the future in 2022 and are rethinking their strategies, according to a survey by trading and leasing operator Container xChange published on 8 December. The survey of 800 shipping lines, container traders, forwarders, NVOCCs, shippers and procurement companies found that 75% are rethinking their logistics strategy in the next year

Most were  downbeat about supply chain performance in 2022 with 65% of respondents saying  that performance will either deteriorate further (11%) or remain the same (54%) in 2022.

The top challenge was finding slots on vessels (53%), followed carrier surcharges (22%) and labour shortage (19%). The remaining respondents (6%) highlighted the challenge of lack of transparency and visibility into the supply chain.

Half the respondents had resorted to one-way container 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.

Container xChange co-founder and chief executive Christian Roeloffs, said: “We foresee that COVID-19 and its new variants will continue to disrupt port operations and labour capacity into 2022.

But he added: “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 labour 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.”