Logistics chain has a week of stabilization

The average price for container transport by sea stabilized last month. This is evident from a monthly overview of the World Container Index, provided by logistics service provider Drewry is being compiled. In mid-October, a drop in prices was visible for the first time in six months. The average price at the time fell by 2,2% to $10.129 per 40-foot container. This decline started after various shipping companies decided to no longer implement price increases. At the end of October, the average price was $9.195 per 40-foot container.

Last month, as described, prices stabilized reasonably well. The month of November ended with a price of $9.186 per 40-foot container. The trend of stabilization continued in the first week of December. The World Container Index recorded a price of $2 per 9.050-foot container on Thursday, December 40, a decrease of 1,5% compared to last week. However, the composite index remains at a high level. The difference with the same period last year is 196%. Also logistics service provider Freightos records a stable trend, with an average price of $9.351 per container.

The highest price must be paid for transport on the route from Shanghai to Rotterdam. Over the past week, the price has been $13.500 per 40-foot container. Since the outbreak of the corona pandemic, the price on this route has increased by $11.000. The largest price drop was visible last week on the 'Shanghai - New York' route. This concerns a minus of 5% to $12.582 per container. Drewry expects that prices on the eight routes mentioned will remain stable again next week.

Contract negotiations ahead
The above shows that the logistics chain is trying to normalize somewhat again. However, there are still some obstacles to be expected, especially in the United States. Contract negotiations are expected to take place next year at private ports in the region from Washington to Southern California. This concerns 22.400 port workers who must sign a new contract in July. However, these conversations – which take place every six years – have not gone smoothly in the past. And that caused labor disruptions and therefore delays.

It does cause some unrest among analysts. Efforts are now being made to clear the record backlogs as quickly as possible. They fear that new backlogs will arise when negotiations start early next year. The union earlier this month rejected an offer to postpone negotiations until 2023 to avoid further delays and price increases.