Container prices likely to decline in India as busy season starts

The sentiment around container prices has seen a marked shift from June to August 2024 among Indian supply chain professionals, according to a survey of 1,200 professionals by Container xChange, an online marketplace for container trading and leasing.

"The September edition of the container market forecaster by Container xChange shows signals of fading optimism amongst the supply chain professionals in India, amidst the busiest times for the shipping industry," says the latest update.

While the early months of the year exhibited strong optimism regarding price increases, the recent data suggests a more cautious outlook from supply chain professionals as market conditions change.

"The Container Price Sentiment Index (xCPSI) is based on surveys from across the world in different locations that we conduct every week with supply chain professionals and gauge their expectations regarding container price developments in the coming weeks. The August xCPSI analysis for India reveals a shifting sentiment in container price expectations. In June, optimism was high with 72.3 percent of respondents expecting an increase in container prices. This confidence strengthened in July with 74.1 percent forecasting a price hike. However, by August, sentiment began to waver as only 63.4 percent still anticipated price increases while a growing 22.4 percent believed in a potential decline, indicating increased uncertainty in the market."

Christian Roeloffs, Co-Founder and CEO, Container xChange says: "This shift in sentiment indicates that while there is still persistent demand driving price increases, there is growing concern about the sustainability of this trend, possibly due to the correction in container availability or demand softening. The market seems to be entering a rebalancing phase where companies need to be cautious and prepared for both potential price hikes and downward adjustments."

Prices continue surge through August
Average prices for 40 ft high cube cargo-worthy containers ranged between $1,200-1,500 across major Indian ports like Mundra, Nhava Sheva, and Chennai in Q12024, the update added. "These prices have surged to an average of $2,000-2,600 in August 2024, reflecting sustained demand and capacity constraints."

As the peak season nears, the shipping container prices surged by over 50 percent from April to August, reaching $2,340 in Chennai.

“The growth in containerised shipments, ex-India, has shown remarkable resilience compared to global trends," says Roeloffs. "Despite the recent threat of strikes (which eventually was averted) and a generally positive demand outlook, the expectation of further price hikes is not surprising. In the container logistics industry, volatility often leads to price increases. The rush to restock inventory ahead of expected demand recovery has primarily fueled this surge in prices. As demand stabilises, there's a good chance that these container prices may not hold in the long term if demand remains subdued."

Companies should remain agile and prepared for both opportunities and challenges as the market navigates through this period of uncertainty, Roeloffs added.