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Category: Global Supply Chain

Global Logistics News: Container Shipping Volumes Continue Steep Fall


Container from China Down 21% from August to November


Dec. 14, 2022
SCDigest Editorial Staff

The volume of ocean shipping containers coming into the US is falling sharply, putting more pressure on now rock bottom rates and fueling concern about the global economy.

Supply Chain Digest Says...

So much so that the spot rate for a container from Asia to the US West Coast has fallen below the breakeven point for carriers.  

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For example, between August and November the volumes of containers coming into the US from China have fallen 21%.

Meanwhile, the monthly analysis from Descartes Systems found November 2022 US container import volumes declined 12.0% from October, and were down 19.4% versus 2021. That put volumes only 2.8% higher than pre-pandemic levels in November 2019.

While some of the fall from October volumes was due to the impact of the Thanksgiving holiday week in the US, Descartes noted that November 2022 had the greatest October-to-November decline since 2016.

The West Coast ports of Los Angeles and Long Beach have experienced the largest drop in container volumes, according to Josh Brazil, vice president of supply chain insights at Project44, as shippers also routed some of their shipments to the East Coast to avoid what appeared to be the risk of a strike by dock workers still laboring without a contract - though that hasn't happened.

The situation is leading to still more voided sailings coming out of China, causing havoc for global logistics managers in terms of container delivery, but doing nothing to stem the collapse of spot rates.

According to a report on CNBC, Asia-based global shipping firm HLS recently told clients it is predicting a further 2.5% decline in container volumes and a nearly 5-6% increase in capacity in 2023, which will continue to pressure rates next year.

The research firm added in its communication that “The container shipping market will be further complicated by economic uncertainty, geopolitical concerns, and also the increasingly heated market competition.”

“Orders are definitely down. Volumes are way down,” said Joe Monaghan, CEO of Worldwide Logistics Group. “Overall vessel utilization is down even with the large number of blank (canceled) sailings.”

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The halcyon days and record profits seen by ocean carriers from mid-2022 until earlier this year are long gone.

So much so that the spot rate for a container from Asia to the US West Coast has fallen below the breakeven point for carriers.

HLS expects most ocean carriers to extend their West Coast rates until December 14, holding at around $1,300-$1,400 per forty-foot equivalent containers (FEUs), in what may be a market bottom – but still a far cry from the unheard of $20,000 or so carriers were fetching a year ago for that same box move.

Rates from Asia to the East Coast rates are expected to drop by $200-$300 to an average of $3,200-$3,300 per FEU in the first half of December.

What are your thoughts on falling contaiiner volumes and rates? Let us know your thoughts at the Feedback section below.

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