The Worldwide Shipping Container Shortage Is Here

Where have all the used shipping containers gone? As you know, shipping containers are the lifeblood of the global supply chain. Without 40’ shipping containers, how can we keep our global economy moving? Even the 20’ shipping containers are in short supply. Factories can’t manufacture them fast enough. The global supply of shipping containers cannot keep up with the demand. But why? Let’s take a deep look at a few of the reasons behind the current global shipping container crisis.

Before we get straight into a few industry facts, and reasons behind the current shortage, let’s discuss how Coronavirus has played a role in reducing our supply of shipping containers.

A year and a half after the global pandemic, COVID-19 is still impacting the world. For the past few months, the global supply chain has been suffering in a tight chokehold with no end in sight. Consequently, the cost of transporting merchandise during this shipping container shortage has skyrocketed.

To further compound the problem, larger carriers are understandably prioritizing their relationships with large shippers. This spells disaster for smaller companies and resellers who are bearing the brunt of an unprecedented price increase in shipping goods across the pacific. In the past, smaller shipping companies only paid a 5% price difference compared to the larger competitors. Currently, smaller companies are paying a 20% price difference, and many can’t afford it.

Worldwide Economies Are Slowly Getting Back In Action

20’ and 40’ storage containers have always been used to transport goods to keep the global economy churning. Whether it is foreign trade between governments, or wholesale merchandise being exported overseas, countries are dependent on the global supply chain. It doesn’t help that our current shipping container shortage is happening at a time when worldwide economies haven’t fully returned to their pre-pandemic positions.

As the demand for wholesale products from China and other nations is still rising, many economies just don’t have anything to send back to Asia to make the journey worthwhile. Therefore, we are seeing massive amounts of containers coming into North and South America, but nothing going back. Consequently, containers are just collecting dust until it has become economically feasible to send them back.

Containers Haven’t Vanished, They Are Simply Stuck

As we discussed above, Shipping container are most needed in Asian regions where the products are. Sitting in inland North American destinations, and South American ports don’t help the container shortage. Due to global lockdowns, and government restrictions, many containers are simply stuck at ports.

Even if certain shipping companies have sufficient loads to make the return trip to Asia economically feasible, COVID-19 restrictions are preventing them. For us, that means all those perfectly good used shipping containers are just stuck at some US port collecting dust.

High Demand Has Caused Shipping Prices to Reach Historically High Numbers

As if global lockdowns and restrictions weren’t enough of a barrier to solving the used container crisis, we also have to contend with extremely high transportation costs. The shortage in shipping container supply has caused transportation costs to skyrocket. We aren’t talking about some nominal amount. Logistics firms and researchers have estimated an average price increase of 526%.

This price increase simply makes it unrealistic for many shipping companies to keep up with the rates set by carriers and another barrier to helping shipping containers return to where they are needed most. With so many used shipping containers in short supply, industry experts have forecasted that North American ports will continue to accumulate containers that have nowhere to go.

The Shipping Container Deficit Is Causing a Domino Effect on the Supply Chain

The entire global trade ecosystem has been impacted by the current container shortage. As a result, fewer and fewer carriers have been sent out by shipping companies to send goods from Asia to North America. With fewer carriers on the open seas, shipping containers are simply not being collected and returned to where they are needed most.

Logistically speaking, China was impacted by COVID-19 first and was one of the first countries to recover. This meant that while their import and export operations were resuming in China, the rest of the world was just beginning to lockdown. Therefore, the entire global supply chain is impacted even though Asia might be in full swing.

Industry Giants Like Hapag-Lloyd and Maersk Haven’t Quite Adapted

The setbacks and shortage of 40’ and 20’ shipping containers have suddenly sprung up leaving industry giants unable to adapt. Given enough time to prepare, Hapag-Lloyd and Maersk might have discovered a way to face the shipping setbacks head-on. However, unfortunately, the shipping container crisis stuck so suddenly, the industry was taken by storm. Some firms have tried to increase container emptying and refilling times, but that only helps so much. The real issue is how containers can economically be returned to where they are needed most. Some firms have even started turning reefer (refrigerated) containers off. This has helped ship non-perishable items like electronics and other dry goods. However, that is only a band-aid to the larger problem.

Additionally, shipping container production hasn’t been able to serve as a solution due to commodity shortages related to the container deficit. The whole issue has created a full-circle domino effect impacting everything from production to availability and even cost.

Global Implications Have Yet To Be Realized

Now that we understand the main reasons behind the shipping container shortage, it seems like we should be able to forecast the global implications. However, that is incorrect. We haven’t fully understood the totality of how this will impact the global supply chain in the future. Only time will tell. One thing that is for certain is that customers, port terminals, and shipping lines will need to work closely together to help resolve the crisis as soon as possible. As we struggle through this unprecedented experience, we can only take notes to ensure we are far better prepared for similar situations that may happen in the future.