Price increases expected due to Red Sea crisis

January 10, 2024

Global Events & The North American Container Market Insights

The shipping industry is currently navigating a challenging period, facing disruptions at two vital canals that impact shippers with longer transit times and increased costs. This turmoil extends to the North American used container market, causing rising prices and heightened uncertainty about container availability.

Simultaneous chaos at pivotal canals

The Panama Canal and the Suez Canal, crucial for global commercial shipping, are both grappling with issues. The Panama Canal, a key route for cargo from Asia to the North American East Coast, has been restricted due to drought since the second half of 2023. Shipping lines reacted by diverting some cargo through the Suez Canal, which, in turn, faced challenges, particularly piracy in the Red Sea and the Gulf of Aden. This forced major shipping lines to reroute south of Africa, nearly doubling transit times. According to Tim Simons, CCO at Eveon Containers, "Imagine a shipping line that might need 8 ships to rotate on any given traffic lane between East Asia and Europe; they will now need 16 ships on this lane to ship the same amount of cargo in the same amount of time."

Outlook: Price increases and uncertain availability

The increased demand for containers by shipping lines reduces availability in the North American used container market. Prevailing uncertainties, exacerbated by Panama Canal restrictions and Suez Canal diversions, make container procurement challenging for the East Coast and Gulf Coast, with prices increasing and expected to rise further. The change is reminiscent of the start of the price hike of used containers because of the COVID pandemic.

Eveon's commitment To Providing Real Time Industry News

Eveon Containers foresees a landscape where availability becomes more uncertain, coupled with rising prices. To be certain of pricing and availability, it is advised to place your orders early. Aad Storm, CEO of Eveon Containers, concludes,

"Our mission remains the same: we're dedicated to securing a steady supply of containers at competitive rates, ensuring all your container requirements are met, even during market uncertainties."