The drag caused by empty containers is expected to further intensify before it gets better as additional containers set to be released into the supply chain are seen to pile up, primarily in Europe and the US, according to Sea-Intelligence.
The maritime analyst said if transportation time is back to "normal" by early next year, millions of excess TEUs of excess containers are headed to North America.
Its analysis was based on Flexport Ocean Timeliness Indicator (OTI) data, which measures the time it takes from when the cargo is ready at the exporter until the importer takes delivery.
"Pre-pandemic, the transportation time was 45 days on average, peaking at a transportation time of 112 days in February 2022, which has since been reduced to 88 days, as per the measurement on 26th August 2022," said Alan Murphy, CEO, Sea-Intelligence.
He added that as transportation times were extended, containers got tied up in the longer supply chain, which is what caused the initial increases in freight rates in the second half of 2020, as not enough empty containers could be moved back out to Asia in time.
"With a massive shortage of empty containers, carriers had to order new containers to be manufactured in Asia, and these were then fed into the extended supply chains," Murphy said.
"As transportation time is now getting shorter, these additional containers will be released back out of the supply chain, and they will start to pile up, primarily in Europe and the US," the Sea Intelligence chief added, noting that the maritime analyst already predicted this development back in February 2022.
Murphy pointed out that the blue line in figure 1 shows the current projection of excess empty containers that will be released into North America, just from the Transpacific trade, and the orange line shows our projection from February 2022.