The shipping container that has been the building block of global trade growth is turning into the latest source of frustration for importers and exporters coping with world-wide supply-chain disruptions
The shipping container that has been the building block of global trade growth is turning into the latest source of frustration for importers and exporters coping with world-wide supply-chain disruptions.
The result is what Tim Boyle, chief executive of Columbia Sportswear Co., on a recent earnings conference call said is a “container dislocation” that has contributed to skyrocketing costs and complicated efforts to meet resurgent consumer demand.Containers are essential equipment for global trade, providing the ability to efficiently handle large volumes of consumer goods, apparel, manufacturing parts and other materials across today’s long supply chains.
The boxes are in short supply even though much of the world seems awash in shipping containers and as production of the boxes is expected to hit record levels this year.Container factories, concentrated almost solely in China, are expected to produce a record 5.4 million 20-foot-equivalent units, or TEUs, of the steel boxes this year, according to Drewry Shipping Consultants Ltd. The production has grown rapidly since 2.8 million TEUs were produced in 2019, part of a yearslong decline in orders amid economic uncertainty and slowing global trade growth.
John Fossey, head of container equipment and leasing research for London-based Drewry, said that in principle there are more than enough containers to handle global trading volumes. In practice, he said, availability in several parts of the world has become incredibly tight because large volumes of containers are stuck in the wrong place. headtopics.com
Mr. Fossey said the pullback in production in recent years may have contributed to today’s shortages, but the disruption triggered by the pandemic has been the main factor hampering availability.Newsletter Sign-upThe Logistics ReportTop news and in-depth analysis on the world of logistics, from supply chain to transport and technology.
PREVIEWSUBSCRIBELars Jensen of Denmark-based shipping consultants Vespucci Maritime, traces the beginning of the container shortage to the early months of the pandemic, in the spring of 2020, when consumer demand slumped and shipping lines canceled many of their routes between Asia and North America. As consumer demand snapped back during the summer of 2020, thousands of empty containers were stuck in the U.S. and exporters in China faced long waits for boxes to ship their goods.
Events such as a grounded container ship’s blockage of the Suez Canal in March, the shutdown of akey port in southern Chinain May and June that left some 350,000 containers idle and big backups at ports in the U.S. and Europe have added to the strains.
Footage showed the Ever Given, the container ship that blocked the Suez Canal in March, on the move again in early July. The owner and Egyptian authorities struck a multimillion-dollar deal for its release, ending a monthslong saga at a critical global trade route. Photo: Mahmoud Khaled/AFP/Getty Images headtopics.com
Now, some U.S. exporters say shipping lines are refusing to send boxes inland to pick up their cargo because they are trying to get empty containers back to factories in Asia as quickly as possible to take advantage of historically high shipping prices for exports from the continent.
Peter Friedmann, executive director of the Agriculture Transportation Coalition, said a survey of members in the fall showed that 22% of sales are lost because they can’t get cargo overseas.For the loaded containers that are sent inland, congestion on rail networks and a shortage of truck chassis, drivers and warehouse workers has led to big backups at cargo facilities as companies struggle to unpack the boxes and get them back into circulation.
A shipping container at Behala inland port in Berlin in January. Congestion, as well as labor and equipment shortages have contributed to a significant mismatch in where containers are located and where they are needed. Read more: The Wall Street Journal »
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