The Harpex Shipping Index, which tracks weekly shipping container rates, has climbed 40% this year to 439 points. Container charterers say that lead times to order container have risen, to over a month in some cases, as not enough are available to meet demand, CNBC reported.
The tight market for the standardized boxes is a result of carriers cutting overcapacity and follows some bankruptcies. But the gains also point to a recovery in global trading after years of lackluster growth.
"The market seems tight... (and) we are urging liners to release more box," said Willy Lin, chairman of the Hong Kong Shippers' Council, which represents manufacturers and cargo owners.
According to Financial Tribune, sector-specific factors like the scrapping of excess ships and the bankruptcy of South Korea's Hanjin Shipping have pushed up the index. But, shippers also say that increasing international trade has added to the container shortage.
Rene Pedersen, Asia/Pacific representative in Singapore for AP Moeller-Maersk, the world's biggest container shipper, said his company expected global container demand this year will rise between 2% to 4%, compared with just 1.5% to 2% growth in 2016.
Rising Asian Trade
The container shortage comes as manufacturing across Asia's big three biggest economies—China, Japan and India—grew unexpectedly fast in the first quarter, adding to evidence that the world's biggest economic region is gaining momentum.
"China's export box transport market is recovering," the Shanghai Shipping Exchange said in its most recent report, adding that growth in the United States' economy was resulting in "a firm recovery in the North America route (from China)."
The average export volumes from East Asia, including Japan, South Korea, Taiwan and Singapore, in February were more than 5% higher than a year ago, Capital Economics said in a March 27 report, citing various sources.
"Economies in Europe and the US are also picking up," Maersk's Pedersen said.
Despite the jump in container rates this year, the Harpex Index remains relatively weak at a third below its last peak in 2015 and 76% under its 2005 record.
Price-Fixing Probe
The heads of several major shipping lines have been presented with subpoenas during a meeting of the worlds' largest firms, the Wall Street Journal reported recently.
US Justice Department investigators arrived at the 'Box Club' meeting of the world’s 20 biggest container-shipping operators, as part of a probe on price fixing.
Maersk Line, the world’s biggest container-shipping line, confirmed it was subpoenaed, as did Germany’s Hapag-Lloyd. WSJ sources said many of the CEOs at the meeting were given subpoenas, while investigators went to the US offices of other smaller operators.
The probe is the latest in a series of investigations by regulators around the world into possible price fixing as the largest ocean carriers have grouped into three major alliances, sharing port calls and vessels in an effort to save billions in annual operating costs. The alliances will begin operations in April, and move about 90% of all cargo across the world’s major trade routes.
Danish news site 'The Local' reported that Maersk Line said it had received a summons from American authorities in connection with “an investigation of the global shipping industry,” but said there were no direct accusations against Maersk itself.
“A summons does not mean that the company has acted illegally, neither does it predetermine the outcome of the investigation,” Maersk said, adding that the company would “cooperate fully” with the investigation.
Maersk's Pedersen said that "the container industry is not out of the woods yet" but that "increased consolidation activity... could lead to a more sustainable industry in 2017."