Industry related headlines to keep you in the know.
The global logistics industry has been facing challenges due to the oversupply of containers causing depots to run on almost 90% utilization, making them less efficient. However, according to the latest report by Container xChange, the industry professionals expect container prices to revive in the coming months.
The Container Price Sentiment Index (xCPSI), which included more than 2,700 participants, recorded a positive value by the beginning of March 2023. The survey found that leasing companies and shipping lines were holding their containers longer than usual in a wait-and-watch strategy, hoping that prices would stabilize. However, excess containers were causing depots to run on 90% utilization, making it difficult for them to move the containers around, and eventually making them less efficient.
Christian Roeloffs, the CEO of Container xChange, said that oversupply of containers had caused depots to run on almost 90% utilization, which made it difficult for depots to move the containers around and eventually made them less efficient. The survey indicated that the industry expected container prices to improve soon, which had revived business confidence.
As geopolitical risks intensify, global economies were also working toward diversifying their production, manufacturing, and container sourcing. Container xChange noted that the process of diversification had already started, and in the future, larger trades would suffer a demand decrease. Capacity needs to be adjusted toward regions with more sticky demand and more stable rate levels.
Agnieszka Polejewska, Container Depot Department Co-ordinator at Langowski Logistics, a company based in Poland, said the industry had reached a stage where old and heavy containers needed to be replaced. She said that the production of new containers was still working, as old, heavily used containers must be replaced.
In conclusion, the survey conducted by Container xChange found that the industry professionals expect container prices to revive in the coming months. The oversupply of containers has caused depots to run on almost 90% utilization, making them less efficient. As geopolitical risks intensify, global economies are also working toward diversifying their production, manufacturing, and container sourcing. The industry must wait and see how this situation is developing because of so many disruptions in our industry. Supply chains will need to be more resilient in the coming years, and these relocation strategies will effectively reduce reliance on one production and supply chain hub to a more diverse, smaller trading pattern.
Written by Andre Klynsmith
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