Importers in Kenya could experience a surge in shipping costs due to a rise in container prices, in the wake of a rebound in international trade.
Container Price Sentiment Index by technology firm–Container xChange shows pessimism on market improvement by industry players.
The August Container Market Forecaster from 2,570 global supply chain professionals, indicates 42 per cent foresee an increase in container prices, 28 per cent expect the container prices to decrease while 30 per cent are expect no change.
Despite the ongoing market fluctuations, the container price index has exhibited, resilience,witnessing growth in July compared to June.
The survey notes that container prices were stable in July as compared to the May-July period, when the market witnessed a dip.
There is also increased focus on key international trade mainly China-US and Europe, with the rush to deliver orders pushing more shipping lines on the high net routes, as opposed to Africa and smaller markets.
US import cargo volumes are poised to reach their peak in August 2023 with the surge aligning with retailers' preparations for the winter holiday season stocking.
According to Fitch Ratings, in the second quarter of 2023, China witnessed a six per cent year-on-year increase in total container throughput, a significant improvement compared to three per cent growth in first quarter of 2023.
This expansion was primarily propelled by intensification of trade under the Regional Comprehensive Economic Partnership (RCEP), introduction of new foreign trade routes at the Dalian port, and upward trajectory of trade with nations participating in the Belt and Road Initiative.
A surge in demand for containers on intra-Asia trade lanes was also observed , for example, the China to India stretch.
The average prices for 20ft cargo worthy containers is currently at $1,200 (Sh172,920) in most markets.
North America has the highest average of $1,393 (Sh200,731).
"These high prices will continue to exert pressure on operating costs for shipping companies. Shippers might also experience increased costs for transporting goods, affecting overall supply chain costs,” said Christian Roeloffs, cofounder and CEO, Container xChange.
The firm offers a container trading and leasing platform, payment infrastructure and efficient operating systems.
The Shippers Council of Eastern Africa (SCEA) however projects stable prices with a possible drop in container prices, but the weakening shilling remains a major concern on the import bill.
According to SCEA chief executive Gilbert Lang’at, the decrease of the container prices witnessed earlier in the year, before picking in July, was a post Covid recovery trend.
This increased the availability of containers on the global supply chain with China a major supplier and user.
“Exports to US is expected to peak and priority in supply. We may see a minimum reduction in cost as we are a heavy import bound market,” Lang’at told the Star on the telephone.
Kenya remains a net importer with China the biggest source.
