Container record in May fuels congestion

Shipping rate hikes likely to continue till Sept amid spike in Chinese exports

- Kang Wan Chern

Shipping lines moved the highest number of containers in a month in May amid a spike in Chinese exports as producers in China rushed to beat upcoming US tariffs on goods made there, and more ships were deployed into service on longer routes around Africa.

The resulting congestion at Asia's ports and jump in shipping rates are expected to continue until September at least, with retailers bringing forward orders to avoid bottlenecks and supply shortages during the year-end holiday season, analysts said.

Demand for container shipping hit an all-time record high in May, with 15.9 million twenty-foot containers shipped globally compared with the previous record of 15.7 million in May 2021, according to data provider Container Trade Statistics.

Data from the same source also showed that 74 million containers were shipped in the first five months of 2024, beating the record set over the same period in 2021 by 150,000.

The increase has been largely driven by record-breaking exports out of China, as concerns mount over the implementation of US tariffs on Chinese goods later in 2024.

In May, China exported a record 6.2 million containers worth of goods, representing almost 40 per cent of the world's container volumes for the month, noted market intelligence firm Xeneta.

Around a quarter of the goods were sent from China to Europe and the US East Coast, the two major trading routes most affected by the longer sailing distances around Africa to avoid violence against commercial ships in the Red Sea.