(Yicai Global) Feb. 17 -- Containers are stacking up in China’s ports as business is slow to pick up after the week-long Lunar New Year holiday last month.  Things should take a turn for the better later in the year but prospects over the next few years are not that optimistic, analysts said.

Although the ocean freight sector has been in decline since the Spring Festival, it will definitely pick up, most likely in the summer or autumn, Chen Yang, editor-in-chief at shipping information platform Xinde Marine News, told Yicai Global. The relaxation in pandemic prevention measures and economic stimulation policies will help boost foreign trade and the shipping sector.

Supply chains have not yet fully recovered from the Lunar New Year holiday, many manufacturers took an extended break and less inventory of raw materials have led to plenty of empty containers piled up in container yards and ports, said Li Mu, an executive in charge of an ocean freight agency.

The Container Availability Index of the Port of Shanghai’s Forty-foot Equivalent Units stood at 0.64 during the week Feb. 5 to Feb. 11, and has remained above 0.6 for 11 consecutive weeks, according to data from Container xChange, a container logistics and operations platform. Readings above 0.5 indicate surplus containers.

This has led to delays in placing orders and production and impacted the amount of goods shipped, Li said.

Usually, ocean freight picks up six weeks after the Lunar New Year holiday, said an employee at a shipping agency. But the market this year is unlikely to recover until at least two months after the break due to a number of adverse factors since the second half of last year.

There is also overcapacity in the shipping industry, Chen said. Freight costs for main sea routes are now back to pre-pandemic levels or even lower. And since the beginning of the year, many new vessels have been delivered, and there will be even more deliveries in the next two years. However, shipping companies will also dispose of old ships.

China’s foreign trade continued to grow during the pandemic and it is not likely to slow this year, said Wang Tiantian, general manager of cross-border supply chains at e-commerce giant Alibaba Group Holding.

Judging from how fast demand is recovering, “the watershed moment” is expected to arrive around June, said Wei Ran, director of the department of customs affairs and fulfillment logistics at Hangzhou-based Alibaba.

Editors: Xu Wei, Kim Taylor