Average container prices drop at LA and Long Beach amidst congestion

Average container prices drop at LA and Long Beach amidst congestion
Average container prices of 40 ft containers at Los Angeles port

The average shipping container prices have declined at the ports of Los Angeles and Long Beach as the ports continue to struggle with congestion.

As per Container xChange’s data, the average prices for 40 ft high cube containers have dropped by just under 11% from US$4,863 to US$4,342 from August to November at the Port of Long Beach.

At the Port of Los Angeles, a 20 ft dry container costs US$1,850 and a 40 ft high cube costs around US$4,342.

Johannes Schlingmeier, CEO and co-founder of Container xChange, said: “The US being an import destination of containers has witnessed an extraordinary number of vessels this year as the demand grew exponentially, especially in the north America region.

“This has crippled the supply chain because the ports and the supporting ecosystem has not been prepared adequately. We need measures to collectively improve the situation at these ports, which has had a domino effect on other ports and in fact on the global supply chain.”

Overall, the average one-way container leasing pickup charges on the China to US stretch have also slashed after it peaked in the month of September from US$2,810 to US$1,760 in October.

Container xChange’s forecast expects to see container prices to level off at a new normal that will be at least double of the pre-pandemic cost by the end of 2022.

The ports in the US have shown very high container availability index (CAx) values consistently compared to 2020 and 2019.

On a global scale, about 78 ports recorded CAx values higher than 0.50, wherein the value of 0.50 represents the ideal balance of inbound and outbound containers.

The CAx at the Port of Long Beach in week 47 of 2021 was 0.88, the highest since the year 2019.

A higher CAx values indicate that the proportion of inbound containers compared to outbound containers is much higher – In 2019 the CAx was 0.67 and in 2020 it was 0.68.

The situation is similar at ports like Oakland, Seattle, Tacoma and other ports in the US West Coast.

At the Port of Oakland, general CAx values between the range of 0.36 to a maximum of 0.65 were seen at a given week throughout 2020 whereas it is somewhere in the range of 0.70 to 0.96 at a given week in 2021.

Even ports in the US East Coast like the Port of Savannah have experienced a dip in the average prices for containers with a 40 ft high cube costing US$4,607 in November while it cost US$5,224 in September – a dip of around 11-12%.

As of week 47, the CAx at the Port of Savannah stands at 0.94 which in the same weeks in 2020 and 2019 was 0.81 and 0.84, respectively.

It is clear that the port is handling a very high number of inbound containers this year as compared to the past two years.