HAMBURG, Germany, May 27, 2022 /PRNewswire/ — 51% of freight forwarders, traders and shippers expect greater chaos in the coming peak season as compared to that in 2021, according to a recent survey released by Container xChange, a marketplace and technology infrastructure provider for container logistics companies.
The latest Container xChange survey titled ‘xChange Industry Pulse Survey’ found that this year’s summer peak season cargo surge will be worse, exceeding the disruptions caused in the peak season of 2021.
Container xChange survey: Peak season container shipping ‘chaos’ on the way
26% predicted this year’s peak season would be less chaotic than in 2021, while 22% expected the level of ‘chaos’ to be the same.
In terms of container sourcing strategy in 2022 when compared to pre-pandemic times, 56% said they had been ‘growing networks’, 38% said they had agreed to ‘long-term contracts’ and 25% said they had followed a ‘multi-tender strategy’ (Figure 1).
37.5% said they were ensuring clients received enough inventory by ‘shipping early’ in 2022. 25% were ‘using alternative shipment routes’ and 18.8% were contracting long-term slot agreements with carriers.
Surprisingly, 62.5% said they were still relying on the spot market or doing nothing specific to ensure shipments reach clients.
Covid lockdowns in China weigh heavily on trade
58% of respondents also reported that Covid lockdowns in China had made it ‘hard to produce/ship as much product as planned’, suggesting that cargo backlogs and unsatisfied demand are building as China’s zero-Covid strategy limits exports to Europe and the US.
One of the xChange customers and respondents to this survey, Amanda Mallia, Head of Sales and Purchasing, Oceanbox Containers Ltd who is based in Italy shared, “We are finding it difficult to forecast where we should be sending our containers and whether we will make any profit since the shipping lines are asking higher fees for SOC containers.”
With China currently in lockdown and thus heavily congested, adding the peak season’s reduced demand for empty containers due to the shifting of holiday spending on services rather than consumer products, we are unsure whether it is wise to return the empties to China.
“Predicting exactly what will happen in this year’s peak season is harder than normal because there are so many contradictory signs and intangibles,” said Christian Roeloffs, co-Founder and CEO, of Container xChange.
“In terms of the supply of cargo, we’ve seen that Chinese Covid-19 lockdowns have affected the availability of cargo for export to key markets in Europe and North America. One big question is whether China is going to sacrifice its zero Covid-19 policy to get trade and its economy moving again.”
“If it does, then there’s every sign that we’ll see a substantial surge as backlogs of exports is shipped. If lockdown rules are relaxed soon and truckers are allowed to get back to work, then those backlogs will be arriving at the same time as peak season orders which could cause a lot of supply chain blockages at ports in Europe and the US where congestion is already widespread.”
“However, there are very few indicators so far that President Xi is willing to compromise health policy to boost trade. Indeed, it might not be politically expedient for him to do so with the Communist Party National Congress set for later this year when he is expected to be endorsed for a third term.”
The container shipping demand conundrum
The other side of this coin is demand, of course. Whether it is GDP forecasts, Purchasing Managers’ Index (PMI) numbers, rising inflation or consumer confidence, multiple metrics suggest demand could be deflating. So that could help offset any sudden rush of cargo from China, especially when there are also signs that consumers are spending more on services instead of products.
Elsewhere in the survey, top challenges identified by respondents aside from China’s ongoing lockdowns were container availability, depots being full, inflation, the Russia/Ukraine crisis and rising prices.
For more information, please visit https://www.container-xchange.com/
About Container xChange
Container xChange is a technology company that offers a container trading and leasing platform, payment infrastructure and efficient operating systems to container logistic companies worldwide. Covering the entire transaction process of shipping containers starting with finding new partners to tracking containers and managing payments, xChange makes using 3rd party equipment as easy as booking a hotel. We are on a mission to simplify the logistics of global trade.
Being one of the top ten logistics tech companies globally, xChange is fundamentally transforming thousands of processes involved in moving containers globally. xChange is trusted by more than 1000 container logistics companies including Kuehne+Nagel, Seaco or Sarjak that use our neutral online platform to remove friction and create economic opportunity.
Media Contact:
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SOURCE Container xChange
