As we step into 2025, the container trading landscape continues to be shaped by elevated secondhand container prices, driven by uncertainties owing to geopolitical tensions, trade wars, and tariff threats. These price trends observed in late 2024 and expected to persist into the first quarter of 2025, implies higher asset costs for container traders, impacting profitability in the short term.
Impact of Geopolitical Tensions and Economic Pressures
"While global GDP growth is forecasted to remain stable, the risks of overcapacity loom large, especially with strong supply growth in vessels and containers over recent years. If capacity is released, such as through resumed Red Sea passages, overcapacity could escalate quickly. Container owners will need to adopt agile leasing strategies and seek out profitable niche trades. For container users, staying competitive will demand a continual evaluation of the cost differences between SOC and COC operations." Further added Roeloffs.
At the start of the year, the container market in the United States is abuzz with speculation that Chinese manufacturers and wholesalers will flood the U.S. and Canada with used containers, as they reportedly have significant stockpiles of these units. On another note, following steel price raise, there is a general belief that prices will go up considerably.
However, there’s notable skepticism about the implementation of tariffs promised during Trump’s campaign, which may influence trade flows. It’s worth highlighting that taxation on used containers is generally lower than on brand-new units, a factor that could be shaping the strategic decisions of manufacturers and wholesalers in this space in the coming times.
"Geopolitical tensions are intensifying, bringing stricter sanctions and compliance requirements. This adds complexity for container owners and users in selecting partners and ensuring adherence to evolving regulations. Strategic foresight and robust compliance frameworks will be critical to success in 2025."concluded Roeloffs.
Chinese New Year and impact on container trade
As we approach the Lunar New Year, container activity across the APAC region is slowing, with freight forwarders focused on clearing cargoes before trucking and port operations wind down for the holidays. Post-New Year, it typically takes manufacturers 1-2 weeks to regain operational momentum, and container leasing rates are expected to remain subdued until mid to late February.
“Container trading is beginning to slow in China, signaling the usual seasonal lull. Our customers are noticing that container manufacturers in China have stopped taking new orders, reflecting a cautious approach to production planning. Interestingly, while China-North America COC prices are softening, SOC prices are showing a slight uptick due to reduced container stock from suppliers ahead of the Lunar New Year. This divergence would lead potentially to a shifting demand and price pressures in the coming weeks.” shared Arno Lindner, Key Account Manager, Container xChange.
Meanwhile, on our platform, container prices have marginally declined for 40 ft cargo worthy containers in China.
The average prices for 40 ft high cube containers in China have declined by 5% month on month on average across locations in December.
Revival in U.S. Import Volumes in 2024
Container xChange studied the official port data and compared Year-to-Date (YTD) loaded import volumes at major U.S. ports from January to November (as the December information is yet to be uploaded until the date of writing this forecaster). The data indicates that the Transpacific Eastbound trade has recovered substantially after the 2023 dip, with a strong rebound at major West Coast ports in 2024. Port diversification strategies implemented by shippers during the pandemic are still influencing cargo flows, with Houston and NYNJ retaining relevance. Market recovery in 2024 signals improved demand and possibly better supply chain conditions compared to 2023.
The rebound at LA and LB in 2024 suggests cargo is returning to traditional West Coast gateways. Consistently growing volumes from 2019 to 2024 at the port of Houston, show the Gulf Coast's increasing role in U.S. trade.
State of Inventories in the U.S.
The November 2024 Monthly Full Report on Manufacturers’ Shipments, Inventories, and Orders reveal a mixed economic picture for the U.S. manufacturing sector. New orders for manufactured goods fell by $2.1 billion (-0.4%) to $586.1 billion, marking a decline in three of the last four months and signaling potential weakening demand. Shipments saw a modest increase of $0.7 billion (+0.1%) to $586.3 billion, breaking a three-month declining trend, while unfilled orders continued their steady growth, rising by $4.6 billion (+0.3%) to $1,404.8 billion. This pushed the unfilled orders-to-shipments ratio to 7.07, up from 7.04 in October, reflecting robust backlogs and longer lead times. Inventories increased by $2.5 billion (+0.3%) to $859.3 billion following two consecutive monthly declines, with the inventories-to-shipments ratio rising slightly to 1.47 from 1.46. (Source: US Census Bureau, published date: 6 January 2025)
“The data suggests manufacturers are balancing strong backlogs and shipment improvements against declining new orders, but the growing inventories could signal overstocking if demand does not rebound soon. This indicates the need for careful inventory and production planning as manufacturers deal with slowing orders and prepare for uncertain demand in 2025.” Shared Roeloffs.
Labor Strikes and Tariff Risks: Implications for Container Traders
In the light of upcoming USMX and ILA contract negotiations scheduled for January 15, Carriers are cautioning their customers and adding General Rate Increases (GRI) as one of the many initiatives. This anticipation has already led to a significant pull-forward of orders since November, helping to sustain elevated container and freight rates. This trend is expected to persist through January, driven by two major factors: first, the contract negotiations and their potential impact on supply chain stability, and second, the Chinese New Year, which falls on January 29 this year, traditionally a period of heightened shipping activity.
“We must be prepared for continued volatility into Q1’25. Average prices of containers, as is shown in our data, are staying strong and there are no reasons for that to fall in the near term.” shared Roeloffs.
December sees year-on-year rise in secondhand container prices
In the United States, Dallas, Miami, New Orleans and Houston stand out for both YoY and MoM growth, indicating sustained upward trends.
Tracking the Global Trends in Container Prices (40 ft High Cube Cargo Worthy):
Over the past year (December 2023 to December 2024), global container prices have experienced significant shifts, with certain locations witnessing remarkable growth while others faced sharp declines. Below are the highlights:
Top 10 Locations with the Largest Percentage Growth
These locations showcased the most notable increases in container prices, reflecting market dynamics driven by factors such as demand surges, regional economic developments, or supply chain shifts:
Top 10 Locations with the Largest Percentage Drop
Conversely, these locations recorded the steepest declines in container prices, driven by oversupply, reduced demand, or other economic pressures:
The Big question – Will demand hold up?
The S&P Global US Manufacturing PMI data for December 2024 highlights a challenging end to the year for the U.S. manufacturing sector. U.S. manufacturing faced significant headwinds in late 2024, marked by falling orders, rising costs, and supply chain disruptions. While manufacturers are optimistic about improved conditions in 2025, the sector's recovery will depend on domestic and global demand stabilization, inflation control, and the policy direction of the new administration.
As we move into 2025, while current market conditions—such as capacity constraints caused by Red Sea diversions and seasonal effects leading up to the Chinese New Year—are supporting elevated freight rates, their sustainability remains uncertain. Much will depend on whether the supply-demand imbalance persists into Q1 and Q2.
In the near term, the market is likely to remain tight, but stakeholders should be prepared for shifts as seasonal demand tapers and geopolitical or economic developments unfold. Monitoring these indicators will be essential for making informed decisions and capitalizing on emerging trends.
According to our proprietary Container Price Sentiment Survey (xCPSI), market sentiment regarding future container price increases was significantly more optimistic at the start of 2024 compared to now. As of January 8, 2025, the sentiment score stands at 52, a significant decline from 71 during the same week in 2024. This shift in outlook has been consistent throughout the second half of 2024 and into the early months of 2025.
The drop in sentiment indicates that market participants are less confident about further price hikes in container prices. For container traders, the shift in sentiment could indicate a more cautious approach moving forward, with less pressure to raise prices and potentially more emphasis on optimizing operations or responding to new market conditions.
