The transpacific route, one of the world’s most vital trade routes, is roiled by a severe container crunch. The shortage is pushing up lease rates and the purchase price of new containers by 50%. Chinese exports are rising driven by consumer demand in the US. As a result, shipping liners such as Hapag Lloyd are repositioning their larger 40-foot-long containers from less busy markets.
Earlier this year, some market participants and analysts predicted that global trade would plunge due to the coronavirus pandemic, leading to container carriers suspending sailings to support freight rates. However, such forecasts appear to be overly pessimistic. Hapag Lloyd said it is experiencing the sharpest increase in 40-foot demand which came after one of the most dramatic decreases in demand ever.
Amid the current shortages, importers are facing long delays for their goods and might have to pay additional charges to get containers. With US-China lanes becoming more profitable, more shipping liners reposition their containers to this route. As a result, other markets experience shortages and higher prices.
