Last year, sea container production stalled at 1.7 million TEU, which stands for a standard 20-foot container. This year, production is expected to reach 4 million TEU. 'That represents a little more than a doubling of production,' explains Lalkens.

The demand is primarily driven by the crisis in the Red Sea. Ships are no longer able to use those waters and are also avoiding the Suez Canal. As a result, ships are now mostly taking the route around the Cape of Good Hope, significantly increasing travel times and causing delays in container deliveries.

Trump as president

As a result, shipping times can be extended by up to four weeks, yet goods still need to be transported. This has led to an increase in container production," Lalkens explains. Additionally, transport demand surged in the second quarter of this year. Shippers have opted to move goods more quickly to avoid the congestion typically seen around Christmas.

'Right now, you can still purchase goods at a lower cost and stock up' Pieter Lalkens, FD-journalist

Additionally, companies that purchase a lot of goods from the United States are anticipating a possible presidency of Donald Trump. The Republican candidate has already pledged to impose more trade tariffs if elected. 'So, right now, you can still buy those goods at a lower cost and stock up,' Lalkens points out.

Chinese production

All those goods require containers for transportation, which are primarily produced in China. As a result, China is benefiting from the increased demand for sea containers. According to Lalkens, this boost is particularly welcome for China, as demand for sea containers had decreased last year.

However, it is difficult to predict whether demand will continue to rise in the coming period. 'The container industry has never been this volatile,' Lalkens notes. 'This started with the coronavirus pandemic. Before that, transport prices were stable and low for years. But since the pandemic and geopolitical tensions, the situation has changed dramatically, and prices are fluctuating widely. It’s uncertain what will happen next.

Source: BNR