Smart containers have grown in popularity in recent years, a trend that was exacerbated by the advent of the covid epidemic and the resulting supply chain disruption, which highlighted the need for improved cargo visibility to deal with lengthier and more volatile transit times.

A container becomes “smart” when fitted with a telematics device that provides real-time tracking and monitoring, enabling operators to increase turnaround time of their containers and so improve equipment availability. It also allows beneficial cargo owners (BCOs) to understand the location and status of their cargo so that they can better control their supply chains.

Drewry estimates that by the end of 2022, around 5.6% of the global container equipment fleet was fitted with smart technology devices, following growth of 57% through the year; an acceleration from the 32% gain recorded the previous year. Already over half of both the maritime reefer and land based intermodal container fleets are smart-enabled, the former up from a third last year, according to Drewry estimates.

Drewry forecasted that the number of smart containers in the global fleet will accelerate over the next five years, to reach over 10m units, representing as much as 30% of worldwide box inventories. 

“As technological innovation lowers the cost of devices and enhances their value to both transport operators and BCOs, uptake is expected to hasten,” Drewry noted.

Smart fleet acceleration will be driven by strong uptake in the dry container fleet, where Drewry sees current penetration as little as 0.7%. Several carriers, including Hapag-Lloyd and Japan’s ONE, have publicly committed to equipping their entire dry box fleet with smart devices, the former as soon as next year. Drewry said it believes these moves will force other leading carriers to follow suit. 

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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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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-lockdown 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 this week.

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.

“What has happened now is that the cargo is ‘on time’ again and hence you’ll see a slowdown in new ordering as companies adjust to more efficient turnaround times in ocean freight delivery.”

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.”

The latest Drewry composite World Container Index — a key benchmark for container prices — has fallen again to $2,773 per 40-foot container. That’s 73% lower than the peak rate in September last year.

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