What Caused the Shortage of Shipping Containers? Let’s find out!

What Caused the Shortage of Shipping Containers?

The COVID-19 pandemic caused production to stop, stores to close, and people to stay at their homes. 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. In fact, 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 right now, they are in the wrong places. 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.

  • 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 brought the manufacturing industry to a halt, leaving traders 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 American and Europe, where they were still under strict lockdown. These parts of the world were struggling 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 no sufficient staffing to handle the incoming shipping containers. The customs clearance was now 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 disrupted demand and supply of shipping containers have led to higher shipping costs. The traders were compelled to pay premium shipping rates for their freights.

Resilience360 mentioned that the spot freight rates went 264% high for 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, prolonged downtime are just adding more to shipping container shortages in 2021.

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 open-top containers to open side containers, from flat rack containers to high cube containers, we are equipped with almost every type of quality container to suit your requirements.

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

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