For months U.S. ports have been struggling to deal with the pileup of empty containers which they cited as one of the issues contributing to port congestion and their inability to handle the surge of imports. While the congestion might normally have been contributing to higher freight costs, a new analysis from Container xChange, a container trading and leasing platform for shippers, suggests that the pileup of empties is contributing to the decline in freight prices. Further, with more disruption likely at U.S. ports, they are predicting continued downward pressure on container prices.

The Southern California ports highlighted the problems created by the pileup of empties calling on the shipping companies to send sweeper vessels to get the extra boxes out of the ports. Many ports around the United States resorted to opening up additional storage locations to deal with the increase in empties. The Ports of Los Angeles and Long Beach even proposed imposing surcharges on long dwell time empties while reporting that they were making some progress in clearing the empties. In March, the Port of Los Angeles for example however showed a nearly eight percent imbalance with 36,000 more containers inbound versus outbound at the port.

“In general, logjams and disruptions lead to increase in container prices, especially in second-hand container prices because more container volume is tied up along the logistic supply chain,” said Christian Roeloffs, cofounder and CEO, of Container xChange. “However, in the United States, there is a pileup of empties as those containers cannot be repatriated back to Asia because of several disruptions one after the other in the past two years, and more recently due to the China lockdowns and Russia Ukraine crisis.”