Drewry estimates that global box production contracted 71% year-on-year to 306,000 teu in the first quarter of 2023, the lowest level since the same period of 2010. While some recovery is anticipated through the remainder of the year, full-year output is not expected to exceed 1.8m teu, the lowest level since the recession-ravaged year of 2009, according to Drewry’s Container Equipment Forecaster.

Currently, several factories in China are either closed or operating on significantly reduced working hours, with full-scale production expected to commence in June.

Meanwhile, this year has seen record returns of containers to leasing companies, while carriers have been busily disposing of ageing and surplus boxes in their owned fleets. Currently, the priority for most container owners is to adjust their equipment pools to better match current trading and vessel supply parameters, and to remove ageing or damaged boxes that have accumulated as a consequence of supply chain congestion over the period of the pandemic.

Drewry expects such retirements to match last year at around 2.8m teu in 2023. Despite high levels of disposals into the secondary market, used dry freight container prices have held up well and are expected to remain steady through the year.

As a consequence, the global fleet of containers is forecast to contract 2% this year to 49.9m teu, representing the first fall in 14 years. The global container shipping trade is expected to remain weak, expanding just 1% in 2023, but a recovery in cargo demand is anticipated in subsequent years as the global economy gathers momentum.

This together with an expanding vessel fleet will drive increased demand for newbuild shipping containers, with output forecast to more than double next year, according to Drewry’s latest assessments. This will return the global shipping container fleet to modest growth, which is forecast to expand at an average annual rate of 2.9% over the period to 2027.

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While there was a shortage of containers at the height of the COVID-19 pandemic, the global economy is now facing the opposite problem: too many containers.

On top of falling freight rates, data shows container depots — used to house containers after they are unloaded — are now filling up or full.
It points to more signs of falling global demand and an impending economic slowdown.

Traders and shippers say the decline in global consumer demand is not a sign the global economy is normalizing after a frantic post-lock down consumption rush, but a downward shift in consumption appetites.

What has happened now is that the cargo is ‘on time’ again and hence you’ll see a slowdown in new ordering…

“There is just not enough depot space to accommodate all the containers,� online container logistics platform Container xChange chief executive Christian Roeloffs said in an industry update recently. “With the further release of container inventory into the market, for example from the disposal of leasing fleets, there will be added pressure on depots in the coming months.�

Italian container depot owner Sogese chief executive Andrea Monti told Container xChange that the peak season of goods shipments — as Christmas looms — “technically did not happen this year.� Retailers are cautious about the high level of inventory they have on hand, Monti said.

To combat full and overflowing depots, ports such as the Port of Houston have started levying fees for empty containers sitting in terminals for more than seven days, according to global claims management provider Sedgwick’s national marine manager, Darin Miller.

“Often left sitting for weeks on end, the sheer number of containers on ships or at ports, leaves us with insufficient depot space which only exacerbates our ongoing supply chain crisis as it impacts container repositioning and movement,” Miller said.

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