With the current market pricing moving so rapidly, we thought we would share further insight into the global container market and attempt to provide further perspective into the current situation in South Africa.
As a brief introduction and to put the current market in perspective, the Financial Times has recently published an article noting the current situation as the biggest challenge the container shipping industry has ever faced!
(Source: Financial Times)
Although container production is at an all time high with forecast 2021 total production being in the region of 4.5m TEU ( vs 2020 of 2.2m TEU), the container factories just cannot keep pace with demand. This can be seen below in the current container inventory awaiting pick-up in China. With inventories at such a low base, the container price will remain very high.
Our view now firmly remains that the container shortage and high pricing will remain well into 2022.
This extended outlook is largely due to the continued forecast of global trade growth and the fact that the shipping lines and container factories just cannot create the required capacity to handle the growth.
We will unfortunately see further price increases flowing through to the local market in the next few days and these will be in the region of $100 - $200 increases.
We hope the above provides a helpful insight into the global container market.
With the first quarter of the year well behind us, we thought it would be a good time to provide a further insight into the current global container market.
Earlier in the year we had forecast an easing in the market during the third quarter of 2021, however there are now signs that the container shortage and high prices may remain into 2022!
This extension is largely due to the continued forecast of global trade growth and the fact that the shipping lines and container factories just cannot create the required capacity to handle the growth.
1.Investigate what companies are generally charging for shipping containers. If the price is significantly better than any other quote, this should raise a specific concern.
2.Only deal with companies that have been in business for some time and have a historical reputation you can track.
3.Ensure other customers are happy with their service, but don’t rely on their website references or testimonials as these are easy to fabricate. You can, for example, check third party reviews such as Google. See ours here: Almar – Google Reviews
4.Don’t be bullied into the sale by claims that this is the last container at this price, or anything similar.
5.When you phone the person, and ideally you should, if the seller has a distinctly foreign accent, this might be an alarm bell. Some fraudsters operate from other countries with no presence in Saudi at all.
6.If there isn’t a landline number on the website, this could be a sign that the company has no physical presence.
7.If there is a physical address on the website, don’t take it for granted that it is genuine. Rather check on Google Maps to make sure it really is a valid address.
8.Check the creation date of the website domain using a domain search website like Who Is (www.whois.com). If the website was created in recent months, this too should be an alarm bell.
9.If you are asked to confirm which bank account you are going to use for payment, don’t provide this information other than possibly stating which financial institution you use. Chances are they are buying time while waiting to open up a suitable bank account to be able to get your payment.
With the uncertainty that 2020 has brought as a result of COVID-19, we felt it was a good time to reflect and project on what is happening in the shipping container industry globally.
The last six months have been incredibly turbulent for large parts of the global economy, but the logistics industry in which the humble shipping container is still central, has managed to continue steadily through the COVID-19 pandemic, albeit with some peaks and troughs.
The roller coaster of a year was impacted largely by the below:
There has, however, been an unprecedented increase in shipping container prices over the last few weeks in China. Prices have increased as much as 25%, soaring to over $2,500 for a used 40ft HC in some Chinese ports. Not only have prices increased, but the availability has drastically reduced, with month on month reductions in idle stock at the factories dropping by 17%.
This has been driven by the culmination of the above “roller coaster” factors, which are now having an impact, as well as impending USA v China trade war tariffs, which are said to be causing large amounts of “pre-tariff trade”.
Reefer containers are big, mobile fridges that are used to transport and store products that need to be temperature controlled such as fruits, meat, fish, seafood, vegetables, dairy, medication and beverages, for example.
Refrigerated containers, known as reefers, keep fresh produce, perishable items, medicines, anatomical waste and beverages cold or frozen. These 20ft (6m) and 40ft (12m) containers are 2.4m wide and run on three phase (380 - 460v) power and can keep the contents at a consistent temperature ranging between -25°C and +25°C. Temperature can be adjusted and controlled to within 0.3°C of required set point.
Reefer containers are bottom air delivery units designed to distribute chilled air from the floor, via specific T-shaped decking, with the advantage of producing a consistent and uniform flow of air across the entire container, powerful enough to ensure a perfect air exchange with the goods.
Although not necessary, storing produce on pallets in reefers assists with stacking, loading and offloading. Nine pallets fit into a 20ft container while 20 pallets fit into a 40ft container.
Each container is supplied with a length of power cable between 10 and 15m long (4 core, 4mm2 cable) and a standard marine grade IP65 rated CEE 17 plug with a 3’Clock earth pin. The electrical point required is a CEE 17 coupler with 3’Clock earth with a 32A D curve circuit breaker to protect the cable / electrical components. Alternatively, remove the C17 plug completely and wire directly into a 32A ‘D’ curve circuit breaker. NB – it requires a ‘D’ curve circuit breaker or motor start breaker. An industrial light start breaker will breakdown and cause single phasing and power supply problems. Reefers require a 3 Phase plus Earth connection – no Neutral is required.
It is important to note that a reefer cannot freeze unfrozen products. Reefers are holding freezers and will maintain the products temperature. The produce needs to be at the required temperature when packed into the reefers.
Reefers are available from Almar Container Group for short and long term rental. Dependent on the location, Almar reefers are rented on a fully supported basis with 24/7 technical support. Almar can assist with technical on-site installation of the reefers should this be required and technical support contact details are placed on all our refrigerated containers should you need to get hold of a technician.
With permanent cold storage facilities you can face high costs and issues with accessibility. Chances are that your cold storage facility won’t be near the place your products need to be transported to. Hence, you’re going to end up having to organise regular transportation, which will lead to spending even more.
A reefer is also much faster to obtain than constructing bulk cold storage. With a reefer, you can have the cold storage you need immediately.
Renting a reefer container from Almar means no additional expenses such as service costs, or expensive repair costs in the event of a mechanical breakdown. Almar takes the risk and covers all these costs.
Reefers are energy efficient. All Almar containers for rent are Carrier - a world-leading brand in container refrigeration. Their optimised assembly reduces power consumption but not airflow.
For minimal environmental impact, R-134a freon of the Carrier has a significantly lower atmospheric life and GWP (Global Warming Potential) than R-404A.
The site needs to be level and built from a suitable material that will prevent the container sinking into the ground. Make sure that the front and back of the unit is level and the doors are square. A slight fall towards the door end will facilitate the cleaning of the interior. This fall should be around 3 to 4 degrees.
The following basic steps can be taken to keep your refrigerated container in good working order:
Almar offers fully supported rental agreements, so we take care of the regular servicing, allowing you to focus on your core business.
The Saudi Government organises one of the biggest entertainment events in the region called Dairiyah Seasons which runs for a month from the end of November to the end of December. The event attracts renowned global artists and entertainers with the venue extending over 130 000 square meters and attracting over one million visitors. Almar Saudi supplied a combination of 59 dry and reefer containers on a rental basis for this epic event.
Almar’s wide range of refrigerated containers provide a versatile and cost-effective alternative to typical cold storage solutions. Not only do refrigerated containers offer an instant secure cold room facility, for either chilled or frozen products, but they are also offered on a rental or outright purchase basis.
Almar Reefer Containers keep your perishable goods at the perfect temperature, in any environment.
Refrigerated containers are an easy way to increase your storage volume and offer many advantages which include the following:
Strictly speaking, a container is anything we put things in for safekeeping or to deliver them somewhere. Theoretically, a ‘container’ could be a corrugated or cardboard box, a crate, or even a drum. However, over the years the transport industry developed a large, robust cargo container ‘box’ with doors, and adapted the design so it could travel by ship, rail, or on a lowbed trailer.
The terms are virtually interchangeable since a cargo container can transport by ship, rail, or lowbed trailer mode. This flexibility enabled container shipping to simplify loading and unloading and dominate the cargo industry.
It also spawned a vibrant market in second-hand containers beyond their use-by dates but still in fair condition. These cargo containers are in popular use as construction site offices, village clinics, holiday homes and so much more. Our customers love them because they are cheaper than brick-and-mortar buildings, and ‘erect’ in a flash.
The cargo container has proved its worth as a quick and convenient way to move goods around the world. Handling and securing equipment on ships, railway trucks, and lowbed transporters have standardised too. A container sent from Durban to London will hold no surprises for dockworkers on the far side of the world.
Those over 20 million containers make a total of 200 million trips every year. At any one time, there are close to six million of them travelling on ships to the four corners of the globe. An average of four of them falls into the water every day, which is remarkably low compared to the number of traffic accidents in Durban!
A number of these containers never make it back to their owners because of the high cost of shipping them empty. There are currently several million of these for sale in cities with container ports, and these are increasingly being turned into economic homes and affordable student housing.
The people who conceived the first cargo container would have had no idea how it would transform commercial transport. Indeed, its influence compares with the extent the internet transformed communication.