An oversupply of containers due to lack of consumer demand and lack of depot space is leading to a rise in blank or canceled sailings, skipping ports. Shipping companies warn of more cancellations and reduce capacity by 15% for the quarter.
To combat full and overflowing depots, ports have started levying fees for empty containers sitting in terminals for overtime. Shippers are giving containers away to reduce crowding at depots.
The latest Drewry Index has fallen again to $2,773 per 40-foot container. That’s 73% lower than the peak rate in September last year. Spot container shipping freight rates fell sharply again last week by 9%, driven down by the Asia/ Europe trade. Drewry said between late November and early December, 14% of sailings have been canceled across major container shipping routes.
After Hapag-Lloyd profits double in the first 9 months, the last quarter is expected to fall 14-49% against Q3.