Where Did All the Shipping Containers Go ?

Friday, 06 August 2021

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 steel boxes are harder than ever to find as surging demand to restock inventories and a series of shipping disruptions has left many thousands of containers stranded at sea on ships anchored near jammed-up ports. Still more are stacking up at inland freight hubs in the U.S., Europe and Asia as companies struggle to cope with the cargo flows that at times have overwhelmed their operations.

MORE NEWS : The Next Shipping Crisis: A Maritime Labor Shortage

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.

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.

Lars 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 a key port in southern China in 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.

News Source : https://www.wsj.com/articles/where-did-all-the-shipping-containers-go-11628104583