Used containers still in high demand – Covid19 effects not over yet
Brand new and second-hand containers have never been so expensive.
When the well-known effects of bottlenecks and supply chain delays began affecting intermodal logistics, brand new and used containers for sale reached their highest prices ever registered. When attempting to delineate price fluctuations and how and when the sundry aspects of the logistics sector might get back to normal, from shipping rates inflation to incredibly high container costs, it is fundamental to consider the main reasons for such a rapid and radical change.
If the loosening of some Covid19 measures had us thinking that supply chains could gradually start over, this delicate process had scarcely begun when current geopolitical events in East Europe brought part of it to an abrupt halt. Even though China is not yet directly involved in the upgoing conflict, it is not hard to understand why companies are considering moving part of their manufacturing away from China to diversify their productions in nearby places.
Before this challenging scenario, many other factors defined container prices and differentiated between second-hand and brand-new containers, with the latter being generally more expensive. This is mainly because of variations in the country of production’s economy and fluctuations in the price of raw materials, such as corrugated steel, whereas the reason for inflated prices in used containers is to be found in a sudden increase in demand and greater availability of the product.
Because geographical collocation and immediate availability draw the line between huge losses of income and economic stability, especially for companies in desperate need of shipping their products to the other side of the world, it all comes down to deciding whether it is more convenient to give a used container a second life or invest in a brand new product that could be sold or converted for other purposes once it reaches a country where shipping containers are in high demand.
Article by Susanna Belleggia.