Boxtor Bulletin – June Container Update

Freight rates soar, and container pricing rises too……

Over the past few months, the shipping container industry has seen yet another dramatic rise in cargo spot rates. 

French carrier CMA CGM, the world’s third largest shipping line, recently confirmed that rates from the Far East to Europe could rise as high as USD $10,000 per 40ft or HC container in the coming few months. This is almost four times greater than the rates charged in December 2023/ January 2024 (circa USD $2200 per 40ft) for the same routes.

Asia to Europe routes and timetables are continuing to be severely affected by the Red Sea crisis as most vessels are now transiting around the Southern Africa. The knock on effect is longer voyage times (12-15 days), reduced capacity and shortage of equipment.  

To counter this, shipping lines are chartering additional tonnage to increase capacity and improve services. The Shipping lines are also now placing significant orders for new containers with factories in China as they look to improve their equipment availability to service demand.  

What does this mean for the UK market?

There is no doubt that the significant hike in freight rates will have a major impact on UK container prices. This, combined with the sudden surge in demand for Chinese factories to build large volume orders for the shipping lines has increased container prices at source over the past few months.

Furthermore, this has impacted production capacity for container wholesalers and traders with some production slots now only available from September this year.

Specialist equipment ,that requires empty freight paying transportation to UK/Europe, such as 20ft and 40ft multidoors (for the self storage market), mini sets (made up of 10fts with 8fts shipped empty inside) and other specialised units such as 20ft open sides, will all see a significant increase in pricing. Many suppliers are likely to “hold fire” in moving these types of containers until the freight rates settle down, and they become more affordable to move again. For now, it simply will not be viable to freight them over during the peak season summer months when slot capacity is severely constrained.

These are challenging times and we should all keep a close eye on the ever-changing global shipping situation as it will affect UK businesses in one way or another. 

This post was originally published for the Container Self-Storage & Traders Association (CSTA). They represent the interests of container self-storage operators, traders & innovators. You can learn more by visiting their website here.

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