A YTD analysis conducted by Container xChange has revealed an increase in average container leasing rates since the onset of 2024, suggesting a rise in demand for these services and a growing financial impact on lessors. This situation hints at a potential tightening of the market. The analysis also identifies strong trade patterns involving container movement, notably between China and Russia, Taiwan and India, and China and India, among other key routes during the year.
Christian Roeloffs, cofounder and CEO of Container xChange, noted, "China to North America one-way container leasing rates have increased particularly in 2024, with the rise mostly driven by a widening container price delta between China and the US (China becoming "more expensive" up until March vs. US container prices stagnating or decreasing)." Significant increases in leasing rates have been observed on routes from China to Canada, with Yantian to Toronto rates jumping by 68% from February to March. Similarly, routes from China to the US have seen substantial rate increases, particularly from Ningbo to Oakland, which saw a 92% increase from February to March 2024.
The report attributes these trends to several factors, including geopolitical disruptions such as the Israel-Hamas conflict, which began in November and persisted into the first quarter of 2024. These events have contributed to elevated leasing rates, especially on routes from Shanghai to Los Angeles, where average rates for 40 ft high cube containers rose by 67% from Q4 2023 to Q1 2024.
Roeloffs explained the volatility in the container logistics sector as stemming from fluctuations in demand and supply, with a current widening gap between the two. He highlighted that one-way leasing rates are primarily influenced by increasing financing costs and the price differences in containers between the origin and destination, leading to higher rates for routes such as China to the US.
Source: container-news.com