Container traders and shipping companies in the region are reaping the benefits of lower rates and enhanced governmental initiatives aimed to establish the region as a lucrative component of the global supply chains., according to Container xChange, an online container logistics platform for container trading, leasing, and management.
The availability of containers has also improved in the region, presenting a great opportunity for container trading and leasing as the world prepares to establish more distributed supply chains, not relying on a linear supply chain anymore. This could be a game-changer for the region and the global economy, especially as western importers move towards a “China+1” procurement strategy.
In March 2023, the average price of a cargo-worthy 20ft dry container in ISC and ME was $1,200, while a cargo-worthy 40 HC container was priced at $1,860, indicating a significant drop in prices compared to just six months ago when the cost of a 40ft container was 38% higher.
The container availability index value of major ports, Nhava Sheva, Mundra, and Chennai rose in March, maintained at 0.77, 0.79, and 0.92, respectively.
There is currently a multitude of containers readily available at three major ports – Mundra, Chittagong, and Jebel Ali. Specifically, the port of Chittagong boasts a high CAx score of 0.92.
The favorable container market conditions in the region offer an opportunity for carriers to target more volumes as the global trade witnesses redrawn trading patterns.
In March, container prices in China experienced a significant decline of 62% on average when compared to the same period last year. In India, there has been a 39% year-on-year drop in average container prices from $3288 in March 2022 to $2088 in March 2023. Contrastingly, the drop in average container prices in India was not as significant as that in China.
The Indian sub-continent and the Middle East are now creating hubs for manufacturers, building infrastructure to support ocean and air transport, and actively making consumer markets more compact. This emerging trend of regionalization is not only viable for businesses but also strategic. It presents a significant opportunity for container shipping companies to expand their supply chains and provide efficient and cost-effective solutions to their customers.
The government of India has intended to integrate with global value chains and take advantage of the ‘China plus one’ approach adopted by multinational companies. Additionally, the country is actively negotiating free trade agreements with important trading partners, which is likely to be well-received by investors.
Also published on Medium.
