The shortage of containers will be alleviated! New container prices and production peaked and are expected to decline

According to consulting firm Drewry, China's container manufacturing industry produced more containers than ever before in 2021 : 7.18 million twenty-foot equivalent containers, up 130% from 2020 and 62% from the record level in 2018 .

As container production hit a record high , so did prices, with factory - built containers commanding a peak price of $4,000 per TEU, double the historical normal price level .

But now, both factory output and prices of new containers have fallen .

According to data from global container lessor giants Triton International and Textainer , the price of new containers has now dropped to $3,400 per TEU. John O'Callaghan, Triton's head of operations , said the drop in new container prices was partly due to large-scale production in 2021 alleviating some of the shortages .

From the manufacturing perspective , Drewry data shows that container production began to decline in the fourth quarter of 2021, reaching 1.76 million TEUs, a 14% decrease from 2.05 million TEUs in the third quarter of 2021. Drewry estimates that production this year will be between 4.5 million and 4.8 million TEUs, a decrease of 33% to 37% from 2021.

However, while prices for new containers have fallen from their peak, prices for used containers on the resale market have not, according to Triton and Textainer .

When port congestion eased , the number of ships waiting in line decreased , making more old containers available for resale, which in turn should have lowered the price of resale containers , but this did not happen.

O'Callaghan said sales prices for used containers remained high throughout the fourth quarter due to continued strong freight demand and a decline in the available number of resale containers .

Textainer CEO Olivier Ghesquiere mentioned that customers are holding on to these old containers for as long as possible, delaying the return of the containers until the deadline on the contract. In this context of high utilization and continued congestion , these containers cannot be effectively restored to use, the container resale market remains undersupplied and prices remain high.

Olivier said that although the number of ships waiting for berths at the ports of Los Angeles and Long Beach has eased recently, the port congestion problem will not end in the short term. It is expected that congestion will exist in the next year .

Olivier mentioned that this is not a problem that can be solved by increasing container capacity, as ships and containers are currently fully utilized , and the real problem lies in inland logistics.

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