The ongoing holiday season will lead to an early burnout of inventories in the US, likely causing inventory replenishment cycles to pick up a little faster than the supply chain and shipping industry predicted earlier this year.

“This would cause an increase in demand in the export hubs as the US begins to work on balancing the order-to-inventory ratio,” said Container xChange's latest update.

“Global trade is undergoing a favorable shift in supply chain dependence from China to newer Southeast Asian markets as the country tightens its zero-Covid policy and grapples with rising labor costs amid other market disruptions. China has grown out of the low-wage countries ( LCC) label, which has given way to other Southeast Asian countries such as India, Singapore, Vietnam and Malaysia to mark their presence in the long-standing regional presence of multinational corporations."

Companies around the world are focusing on creating regional alternatives to curb supply chain disruptions that are emerging due to high labor costs, new lockdowns in the country and protests in the country, the update said.

With the dramatic fall in consumer demand and with more containers available, spot rates on trans-Pacific routes between some countries in East Asia and the US have also fallen dramatically. “The spot price of a 40 ft container on the China-West Coast route fell 20 percent to $2,361 in October. A year ago, the typical premium price was $20,000. Across the Atlantic, shippers in the US are witnessing There has been a 20 percent drop in ocean freight orders and ocean carriers have canceled half of their sailings to ensure their vessel capacity matches demand.”

The one-time pick-up fee for standard containers from China to North America has dropped monthly since May 2022 from $1773 to $344 in October. The cost of a one-way ticket from China to Europe fell from $2,845 in January 2022 to $1,726 in May 2022 and to $910 in October.

“The supply chain is already struggling with an oversupply of containers, maximum depot space and an increase in blank sailings,” said Christian Roeloffs, co-founder and CEO of Container xChange. “The zero covid strategy and the geopolitical and trade risks in China will further contribute to the drop in demand for containers in China. However, it also means that demand will slowly stabilize and get closer to the level it was at before the pandemic ." started."

Container Availability Index (CAx) values ​​are much higher than pre-pandemic – meaning incoming containers this year are significantly higher in Chinese ports than imported cartons compared to 2019 (pre-pandemic). “This indicates that not as many containers are leaving ports from China, which is clear and obvious now given the uncertainties looming for Chinese shipping.”

Container prices are significantly lower in Indonesia, Thailand, Malaysia, Singapore, Vietnam and India compared to China, well confirming that the Southeast Asian countries have been chosen as China plus one alternative, the update said.