The extremely consolidated container manufacturing industry in China built more containers than ever before in 2021: 7.18 million twenty-foot equivalent units, according to consultancy Drewry, up 130% from 2020 and 62% from the previous record year in 2018.

Record container production coincided with a record surge in prices, underscoring the sheer intensity of demand as supply chains buckled. Factories were getting close to $4,000 per TEU for newly built containers at the peak, double the historical norm.

But now, both the factory output and the price of new containers are pulling back.

New boxes: Signs of easing

According to Triton International and Textainer — the largest and second-largest box equipment lessors in the world — new container prices have fallen to $3,400 per TEU.

"New container prices have come down … in part due to the high volume produced through 2021, easing some of the shortage," said John O'Callaghan, Triton's head of operations, during a conference call with analysts on Wednesday.

On the manufacturing front, data from Drewry shows that container production started pulling back in Q4 2021, at 1.76 million TEUs, down 14% from 2.05 million TEUs in Q3 2021. Drewry estimates that production will total 4.5 million-4.8 million TEUs this year, down 33%-37% from 2021.

Inventory levels of equipment at container factories have also rebounded.

According to O'Callaghan, "The high container production in 2021 has alleviated some supply constraints. Container factory inventory is up to normal levels."

Asked by an analyst about signs of market easing, Triton CEO Brian Sondey responded, "In terms of market dynamics, from July 2020 to around July-August-September-ish 2021 was one of the few periods I've seen in my 23 years when container supply was the overall limiter of global trade, when there was just an absolute shortage of container capacity.

"We are in a situation now where the market is still tight, and we are still effectively at almost 100% utilization, but it is no longer a fact that every container a shipping line gets means one more cargo load they can take. The lines have enough containers in their system to move the cargo.