Sharp fluctuations in container ship utilization are currently causing recurring logistics bottlenecks. However, unlike during the COVID-19 pandemic, a shortage of containers is unlikely this time.
Rising freight rates, container congestion, longer port dwell times, and hinterland logistics bottlenecks have recently been triggered by Donald Trump’s ongoing trade disputes with various countries. Despite these pressures, the container market is not currently facing a supply shortage.
The production of new containers in China has surpassed previous records set in 2024. According to Hong Kong-based market intelligence firm Linerlytica, the stock of new containers in China reached 1.55 million TEU by the end of May.
The analysts explain that earlier fears of a shortage of boxes have not been confirmed. Despite delays in the repatriation of empty containers from Europe and North America, a sufficient number of containers were available.
Shipping companies and leasing firms have been taken advantage of lower new container prices to place additional orders. Over 2.3 million new containers have already been produced this year. Linerlytica expects assumes this surge in output will be enough to prevent a repeat of the situation in 2021, when China’s inventory dropped to just 100,000 TEU.
Impending container oversupply?
Despite record-breaking production, several market observers are now warning of a potential oversupply. According to Container xChange, container availability has increased to the point where leasing rates are falling, particularly on transpacific routes. For instance, prices between Shanghai and New York have dropped by 24%.
A similar trend is evident on China-Europe routes. Lease rates for 40-foot high cube containers from Shanghai to Rotterdam or Hamburg have declined from over $800 (approx. €744) to around $650-680 (approx. €605-632) in recent weeks. This drop reflects weakening capacity utilization and stagnant demand.
Analysts at Drewry and other firms caution that continued high levels container production, combined with declining trade figures, such as a decline in U.S. imports from China of over 25 %, could lead to structural overcapacity. Experts are particularly critical of the fact that many shipping companies are continuing to order new ships and containers despite falling demand for transportation. Although this ensures stability in container availability, it jeopardizes the price structure in the medium term and can put pressure on smaller market participants.
A new trade conflict between U.S. and China could further destabilize global supply chains. Shipping companies need to reroute their vessels, manage uneven capacity utilization, and respond to fluctuating freight rates. Companies would be confronted with rising procurement costs, growing uncertainty and the need to restructure their supply networks. The impact would also be felt by consumers: higher prices, delayed deliveries and limited product availability.
Although the global economy has largely recovered from the pandemic and energy crisis, it remains vulnerable due to geopolitical tensions, high interest rates and fragile supply chains. A renewed trade conflict between the U.S. and China could exacerbate these structural weaknesses and leave much deeper scars – from permanently disrupted trade flows to the further division of the global economic area into competing blocs.
