As transportation times got extended, containers were tied up in the longer supply chain, which is what caused the initial increases in freight rates in the second half of 2020 as not enough empty containers could be moved back out to Asia in time.

"With a massive shortage of empty containers, carriers had to order new containers to be manufactured in Asia, and these were then fed into the extended supply chains. As transportation time is now getting shorter, these additional containers will be released back out of the supply chain, and they will start to pile up, primarily in Europe and the U.S," says Sea-Intelligence in its latest update.

"We predicted this development back in February 2022, and this week we analysed whether our prediction was on track," says Alan Murphy, CEO, Sea-Intelligence.

The blue line (figure 1) shows the current projection of excess empty containers that will be released into North America from the Transpacific trade, and the orange line shows projection from February 2022.

"If transportation time is back to "normal" by early next year, we will see the release of 4.3 million TEU of excess containers into North America, which cannot be expatriated, within the planned network operations."

This will potentially overwhelm empty container depots in the U.S., an issue which is already beginning to materialise, the update added.

Drewry composite down 5%
Drewry composite index decreased 5 percent to $5,378.68 per 40ft container, and is 47 percent lower than the same week in 2021. Freight rates on Shanghai–Los Angeles dropped 14 percent, or $780, to $4,782 per FEU.

Drewry expects the index to decrease in the next few weeks.

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