Container costs go crazy

Just a quick update on this post we wrote analyzing the situation of transportation market, and explaining why the container prices were skyrocketing and how we saw the situation.

Here is the current situation (averange prices that WE pay for containers, which is not necessarily the market price):

We are at the begining of March and container prices are going down, but not much. Why is it taking so long for prices to go back to normal?

First reason is that before Chinese New Year holidays, a lot of companies postponed shipments, due to the high prices (price for 20ft container reached almost 10000USD at one point!). So there is still a lot of material pending to ship. With ships full, big shipping companies have few incentives to lower the prices radically.

Second reason is that, as we explained on the other post, there has been a lot of market consolidation, big shipping companies bought smaller ones. So there is less competition, which means that the remaining players have more control of the prices.

Anyway, this week the 20′ container (from Ningbo to Barcelona) is around USD4000, so prices have been declining, and we expect they will slowly continue going down. So if you need to ship but it’s not urgent, probably each day that you delay will save you some transportation costs. But, as we said, don’t expect them to go back to 700-800USD anytime soon, these prices are probably history

Marc Torras