Why There is a Global Shortage of Shipping Containers: 5 Main Reasons

The COVID-19 pandemic caused production to stop, stores to close, and people to stay home. The situation has hit almost every business, and the shipping industry is no exception.

Even the industry’s big players are struggling to meet the sudden surge in demand for shipping containers. These big manufacturers of shipping containers have constantly ramped up production, but the shipping container shortage still exists.

So, what is the reason behind the global container shortage? Has there been too much demand that outpaced the supply? Or are there not enough shipping containers available?

The answer is simple. There are enough containers available globally, but they are in the wrong places right now. Most of the containers are at inland depots, others at cargo ports.

To understand why there is a shortage of shipping containers, we need to know why these containers are in the wrong places.

How are Changes in the Shipping Container Industry Affecting the Global Market?

The world may face the most unexpected consequences of a shipping container shortage. First, it is a global maritime crisis. Of course, this industry brings too much profit to the owners of shipping companies to stop developing, but most transported cargo still uses sea containers.

Thus, the shipping container shortage can negatively affect a huge number of shipping companies, thereby reducing the rate of transportation and complicating the delivery of cars, spare parts, motorcycles, and even bananas! This is just a small list of products transported in shipping containers. Bulk carriers, Ro-Ro ships, and General Cargo ships are equipped with special devices and guidelines for transporting sea containers, although they were originally intended for other types of cargo. But a shortage of shipping containers could change everything.

Surely it is not worth explaining what percentage of the budget of entire countries is made up of sea freight and taxes from this industry, and how many jobs are provided by ship owners and seaports that receive containers.

The start of the pandemic

Starting from Wuhan, the pandemic spread all across the globe in no time. And to control it, countries imposed heavy restrictions on people’s movement and imports and exports to limit international activities. These restrictions halted the manufacturing industry, leaving traders with almost nothing to ship. As a result, shipping giants cut the number of onboard vessels. Asian traders now had more empty containers that were not getting picked up, especially from North America.

China’s Early Recovery

China was one of the first nations to curb the spread of the COVID-19 virus successfully. Limiting the number of people, China resumed production sooner than any other country. Traders started shipping their goods once again. The remaining containers were sent to different parts of the world, mainly to North America and Europe, where they were still under strict lockdown. These parts of the world struggled to maintain workforce balance and resume international trades.

Less Workforce At The Receiving End

North American and European ports faced workforce shortages because of the COVID-19 restrictions. There was insufficient staffing to handle the incoming shipping containers. The customs clearance became more difficult as containers started clogging up at these ports. Less than half of the arrived containers were shipped back, creating an imbalance in the supply chain.

Surged Shipping Costs

The global shortage of shipping containers has led to higher shipping costs. The traders were compelled to pay premium shipping rates for their freight.

Resilience360 mentioned that the spot freight rates went 264% higher for the Asia to North Europe route as compared to the year 2020, and for Asia to the West Coast of the U.S., the rates spiked 145% (YoY basis).

The shipping industry is trying to catch up with the situation, but nothing seems to be improving. Congested ports, increasing consumer demand, and prolonged downtime just added more to shipping container shortages in 2022.

How can Pelican Containers change that?

We are aware of the current market situation and are prepared for the risks involved. We have extensive inventories of containers ready to ship your goods. From 40ft standard shipping containers and open-top containers to open side containers, from flat rack containers to 40ft high cube shipping containers and 45ft high cube shipping containers for sale, we are equipped with almost every type of quality container to suit your requirements.

Pelican Containers strongly recommends reserving your container immediately as the cargo container shortage continues to grow. Of course, you can be assured of the quality of containers and the competitive price we offer despite all this turmoil.