Shipping Containers: What Do the Cans Tell Us?
What can we learn from the movements of shipping containers, or cans? Plenty. Here’s how they provide clues about future global trading patterns.
Despite possible future disruptions, Stefan Paul, CEO of Kuehne+Nagel, arguably the world’s largest air and sea freight forwarding business, sees bright spots ahead for global shippers and brokers in the coming months. The recent telltale movements of shipping containers, or cans, give insight into those future global trading patterns.
Plenty of crowdsourced intelligence is available to show how smart supply chain managers and their enterprise leaders are adjusting to the macro trade environment expected in 2023. To latch on to those global supply chain bright spots that Paul predicts, what can we learn from container movement patterns?
Plenty. Malaysia, Vietnam, and Singapore are now strong contenders for a China plus one strategy for 2023 and beyond, according to a Container xChange analysis.
An intriguing trend tracked in August shows a 36% increase in average container prices from those countries and a 21% increase in one-way leasing rates for containers in Southeast Asian countries overall. From a different angle, average leasing rates for containers—all types, all conditions—from China to the rest of the world fell from $1,454 in July 2022 to $1,080 in August.
An additional data point is that the average leasing rates for seaworthy cans rose from $607 in July 2022 to $738 in August from Southeast Asian lanes to the United States.
What’s the net result of this repositioning? Vietnam’s exports hit $336 billion in value, up 19% from the prior year even in the face of the pandemic. Global investment in Vietnam production is way up and is driving the export boom while China’s exports face headwinds—some internal with lockdowns and energy-related plant shutdowns and some external with the softening appetite for consumer goods in the West.
To put things in perspective, with consumption patterns of Chinese goods shrinking, high inflation, and an inexplicable energy policy, smart leaders managing global supply chains will clearly continue to increase redeployment to alternative Southeast Asian countries like Singapore, Malaysia, Vietnam, and others. China’s recent customs data for exports shows an increase of only 7.1%; analysts expected a 13% rise.
Here’s another measure of a shift in container flow. Volume at The Port of New York and New Jersey in August 2022 increased by 24.1% compared to August 2019, moving 843,191 TEUs (twenty-foot equivalent units). The seaport marked the busiest August in its history, placing it as the top port in the nation and eclipsing West Coast, China-centric ports.
That’s what those cans tell us.