Traders unsure how container prices will move in 2025

The Container Price Sentiment Index (xCPSI), monitored by Container xChange, was at 52 as of January 8, 2025, a significant decline from 71 during the same week in 2024. This shift in outlook has been consistent throughout the second half of 2024 and into the early weeks of 2025, says the latest update.

"The drop in sentiment indicates that market participants are less confident about further price hikes in container prices. For container traders, the shift in sentiment could indicate a more cautious approach moving forward, with less pressure to raise prices and potentially more emphasis on optimising operations or responding to new market conditions."

At the start of the year, the container market in the United States is abuzz with speculation that Chinese manufacturers and wholesalers will flood the U.S. and Canada with used containers, as they reportedly have significant stockpiles of these units, the update added. "On another note, following steel price hikes, there is a general belief that prices will go up considerably.

"However, there’s notable scepticism about the implementation of tariffs promised during Trump’s campaign, which may influence trade flows. It’s worth highlighting that taxation on used containers is generally lower than on brand-new units, a factor that could be shaping the strategic decisions of manufacturers and wholesalers in this space in the coming times."

Christian Roeloffs, Co-Founder and CEO, Container xChange says: "Geopolitical tensions are intensifying, bringing stricter sanctions and compliance requirements. This adds complexity for container owners and users in selecting partners and ensuring adherence to evolving regulations. Strategic foresight and robust compliance frameworks will be critical to success in 2025."

Chinese New Year and impact on container trade
As we approach the Lunar New Year, container activity across the APAC region is slowing, with freight forwarders focused on clearing cargoes before trucking and port operations wind down for the holidays, the update added.

"Post-New Year, it typically takes manufacturers one-two weeks to regain operational momentum, and container leasing rates are expected to remain subdued until mid to late February.

"Container trading is beginning to slow in China, signaling the usual seasonal lull," says Arno Lindner, Key Account Manager, Container xChange. "Our customers are noticing that container manufacturers in China have stopped taking new orders, reflecting a cautious approach to production planning. Interestingly, while China-North America carrier-owned container (COC) prices are softening, shipper-owned container (SOC) prices are showing a slight uptick due to reduced container stock from suppliers ahead of the Lunar New Year. This divergence would lead potentially to a shifting demand and price pressures in the coming weeks.”

The average prices for 40 ft high cube containers in China have declined five percent month on month, on average, across locations in December.

Revival in U.S. import volumes in 2024
The Transpacific Eastbound trade has recovered substantially after the 2023 dip, with a strong rebound at major West Coast ports in 2024, the update added. "Port diversification strategies implemented by shippers during the pandemic are still influencing cargo flows, with Houston and New York New Jersey (NYNJ) retaining relevance. Market recovery in 2024 signals improved demand and possibly better supply chain conditions compared to 2023.

"The rebound at Los Angeles (LA) and Long Beach (LB) in 2024 suggests cargo is returning to traditional West Coast gateways. Consistently growing volumes from 2019 to 2024 at the port of Houston show the Gulf Coast's increasing role in U.S. trade."

Over the past year (December 2023 to December 2024), global container prices have experienced significant shifts, with certain locations witnessing remarkable growth while others faced sharp declines.

Will demand hold up?
While current market conditions such as capacity constraints caused by Red Sea diversions and seasonal effects leading up to the Chinese New Year are supporting elevated freight rates, their sustainability remains uncertain. Much will depend on whether the supply-demand imbalance persists into Q1 and Q2, the update added.

"In the near term, the market is likely to remain tight but stakeholders should be prepared for shifts as seasonal demand tapers and geopolitical or economic developments unfold. Monitoring these indicators will be essential for making informed decisions and capitalising on emerging trends."

First published on Logistics Update Africa