The bubble for container leasing rates, which have risen sharply in recent months, could be due to burst by the end of June.

Rates for 40-foot-hight cube containers for lease in China increased by 45% between April and May, according to freight technology company Container xChange. That was largely driven by Red Sea shipping diversions that have stretched ocean carrier networks, while Houthi rebel attacks on vessels have persisted, resulting in many shippers moving scheduled shipments up, in anticipation of future disruptions. 

Moving forward, Container xChange's forecast model predicts that "this price bubble will burst" in the second half of 2024, qualifying the current demand for shipping capacity as "temporary." 

"We expect that the elevated container prices we've seen in recent months may not be sustainable," said Container xChange CEO Christian Roeloffs. "As the initial rush to restock inventories subsides and the real demand from consumers and businesses remains flat, we anticipate a stabilization or even a decline in container prices in the mid-term."

Roeleffs notes that consumer spending in the U.S. increased by 2% in Q1 of 2024, which was below the projected 2.5% estimate for the quarter. Meanwhile, retail inventories rose by just 0.3% between March and April, "indicating only cautious restocking by retailers." The expectation for the months ahead is that concerns over factors like high interest rates and depressed labor markets will continue to lead to less spending from consumers, which would drive down shipping volumes in kind.