Shipping Container Prices Could Take Months to Stabilise
KUALA LUMPUR (31 March 2021) – With the Ever Given container carrier finally unwedged from the Suez Canal riverbank, as of Tuesday morning, it is estimated up to 140 ships are now able to pass freely through the water-based superhighway. However, despite the resounding chorus of joy from the global logistics and consumer markets, shipping container prices will still take months to stabilise, says James Yeoh.
On 23 March 2021, while traveling through the Suez Canal in Egypt, the Ever Given, a shipping container carrier, was caught in a sand storm and buffeted by strong winds resulting in a “loss of ability to steer” that forced the hull to deviate and eventually run aground, blocking the canal on both sides and obstructing the journey of 300 vessels at either ends of the route.
According to James Yeoh, Director of Solid Horizon Sdn Bhd, usually prices of shipping containers would have stabilised by March after the end-of-year uptick from the high volume of spending that goes on during the festive seasons. However, because of the Suez Canal incident, we’re passing the downtrend and moving into the mid-year upswing which could translate to another several months before we see prices of shipping containers start to stabilise.
“Normally, we expect prices of shipping containers to increase by year end due to the high volume of import and export during the holiday seasons like Christmas and the New Year and then prices could start dipping closer to March. But due to the Suez Canal incident, there’s a shortage of shipping containers which are driving the prices up and despite container carrier ships now able to sail through the Suez Canal, it could take weeks or so before they dump their cargo. We can be looking at months before the prices start to stabilise, and even then we won’t be seeing prices dip to previous lows,” James says.
Solid Horizon Sdn Bhd is a Malaysian supplier and manufacturer of shipping containers with 30 years in the industry. The company specializes in the manufacturing of portable cabins, heavy duty cabins, labour quarter cabins, toilet cabins, guard houses, used containers and polyurethane cabins.
James adds that logistics companies were losing up to $1 billion or MYR4.16 billion (as of writing) by week’s end following the delay of carrier vessels at the Suez Canal.
“When the containers remain on the vessel and aren’t in transit for more than a week, it’s a loss for the logistics companies,” James says.
He adds, “when the ships sit in the water for a week, they’re basically burning money. This impacts the logistics market which in turn disrupts the commodities market because shipping containers are 80% steel core. So the impact of the Suez Canal incident isn’t limited to shipping containers, but commodities, real estate and many others and we might see a recovery period of several months.”
Companies looking for light weight or heavy duty shipping containers for various purposes can contact Solid Horizon, a Malaysian manufacturer and supplier of cabins and containers. Visit our website here or email us at email@example.com and call us at 03 3396 3888