LEVEL OF CONTAINER PRICES AND THE BACKGROUND

Freightos Baltic Index (FBX) / Global Container Freight Index; is an index where you can monitor global container weekly prices and which provides data for those operating in this field. It helps you to follow the average price of a 40-inch HC (high-cube) container.

It is possible to see the weekly price development of a 40 inch HC container from the FBX index dated 11.6.22021 as below-tabulated. As of June 11, 2021, the value of the FBX index has reached the level of 5,926 USD. The graph indicates that container prices, which were circa 1,400 USD in 2020, increased by 3.2 folds during the last 1 year and reached the level of 6,000 USD.

In addition to FBX, there is also CAx Container Availability Index, which shows the availability of containers. The CAx index gives you the rate of availability of a 40-inch HC container for 11 major routes around the world. When we look at the details of the index with 2019-2020-2021; In 2021, container availability on all routes has increased compared to 2019 and 2020. The availability rate, which was 40% in 2019 and 2020, has reached around 60% as of June 2021. On the contrary, container prices continue to increase.

The price of a HC container (with dimensions of 2.35x11.98x2.35 meters with a volume of 66 m3 and a weight of 3.7 tons together with a maximum loading capacity of approximately 26 tons, and with a purchase cost of between 4.000 – 6.000 USD), has reached 6,000 USD level in one direction. Just this level of pricing is a topic to worth consider.

The average USD/kg export price of our country is at the level of 1.20 USD/kg.

USD/kg export prices of other developing countries are by and large at the same level. On the other hand, when we consider that the USD/kg export amounts of developed countries are 4-5 times higher than these levels, it will be seen that container prices have reached a significant level of the amount of export goods in the recent period.

When we look at the container issue from this point of view; Considering that max. 26 tons of products can be loaded to a container, 28.6k USD export goods can be loaded to a container. (26 tons x 1.1 USD/kg = 28,600 USD, based on the average export price). However these loading amounts ​​are often not reached in real life due to density differences, empty spaces in the containers... Only the cost of the container corresponds to approximately 20% of this amount. Taking into account the maximum loading amount of 26 tons is not feasible in practice, we can say that current container prices have reached roughly 40% of the total export value.

The most important question here is that: how developed countries that load an average of 14-15 k USD worth of export goods, paying a container cost of approximately 6,000 USD / 40% of the cost of goods, will be able to compete with developed countries loading 75k USD per container with approx. 8% of this as the container cost? On this basis, how can we can compete and increase our exports in a sustainable way?

What does this mean?

If the current level of prices becomes permanent, it is not difficult to foresee that the production of the products exported by developing countries will become more advantageous to be produced by developed countries and this will result in localization of production.

Could high container prices be a conscious choice made by countries such as the UK and the USA, which have serious foreign trade deficits against developing countries with a straregy to protect their own economies?

Taking into account this risk, we need to develop our strategy on how we can increase our export value per kilo as of today.

Focusing on value-added products in exports, investing in maritime transport and directing our local producers to become global players seems to be important elements of this strategy.

13/06/2021

Etiketler: global container index, FBX index, container avaliability index,

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