The container market is in the eye of the storm, but imports are expected to pick up

The container industry is experiencing a sharp decline in freight prices and falling import volumes. Nevertheless, APM Terminals Gothenburg is continuing to grow and believes that imports will recover in the middle of the year. 

Just as ships start to have spare capacity and supply chain blockages have been resolved, demand for container freight is falling and freight prices are following suit.

"Before the pandemic, the freight price for a container from Asia to Gothenburg was around SEK 10,000 (approx. 900 Euro). During the pandemic, when prices rose the most, it was not unusual to see a ballpark price of SEK 70,000 (approx. 6,000 Euro or more. Shipping prices are now down to pre-pandemic levels," says Per Wahlström, market analyst at APM Terminals Gothenburg.  

'Bullwhip effect' of imports

Imports of products such as building materials and fitness products have slowed down and purchasing power has decreased significantly since the pandemic. The companies that took in large volumes to act as a buffer are now well stocked.

"High stock levels mean low demand for sea transport. We're seeing a so-called 'bullwhip effect' on imports, where volumes have fallen by almost 20% compared with 2022," says Per Wahlström.

Imbalance between imports and exports compensated by empty containers

At the same time, Swedish exports, especially of forestry products, are stronger than ever. The suspension of Russian forestry exports has given powerful momentum to the Swedish forestry industry and purchasing power in Asia remains strong.

"The imbalance between imports and exports is huge and the gap is currently being covered by empty containers. Ports that can offer a flexible supply of empty containers benefitting the market, but in the long term it's important to have balanced flows, for the sake of both your wallet and the environment," says Per Wahlström. 

APM Terminals continues to grow – tough times for smaller ports with large import flows

New statistics from the Ports of Sweden show that the three largest ports in Sweden are continuing to grow, and APM Terminals Gothenburg was able to round off last year’s final quarter with very good volumes.

“One clear trend in recent months is that shipping companies have chosen to consolidate their import flows to the larger ports in order to increase the filling rate on boats,” says Per Wahlström.

"Import-heavy ports that benefited from strong import flows during the pandemic are now seeing a strong decline in volumes and ports with a broad customer base and a large service offering are growing." 

Imports expected to increase in the middle of the year 

The high inflation rate has slowed down in the USA and, despite the fact that it's still prevailing in Sweden, the same trend is expected to happen here. As inflation decreases and the economy recovers, import volumes will follow suit, according to Per Wahlström. “We believe imports will pick up as early as the end of Q2 this year,” he concludes.

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The container market is in the eye of the storm, but imports are expected to pick up