Amid the challenges faced by the shipping industry this year with the Coronavirus pandemic and wharf industry action, comes an unforeseen hitch: a shortage of shipping containers – largely resulting from the limited availability of empty containers at Asian origin ports.
The industry is facing a strong demand on containers out of China and major ports around Asia, due to a decrease of imports there combined with a surge on exports, well ahead of the usual peak season. The crisis is especially severe for 40ft containers, and getting them back to China has become a top priority for shipping lines.
Many carriers are prioritising the repatriation of empty containers back to Asia as fast as possible, even to the point where they are willing to forego viable export cargo, as that would only slow the process down. In some cases, shippers are now being encouraged to substitute 20ft boxes for 40ft-ers wherever possible, meaning both types would soon be in very short supply.
According to reports, freight rate increases as a result of the shortage are already being felt on routes from Asia to Europe and across the Pacific to the USA. Limited equipment availability has also hit intra-Asia routes, the largest trade-lane in the world, with some 30 million 20ft equivalent unit (TEU) shipping containers carried within it each year.
The world’s largest container vessel operator, Maersk, acknowledged last month that there has been a shortage of equipment and, in particular, 40ft containers in the market “for months due to the red-hot market on the Pacific.†In a recent announcement, they added that COVID-19 is having a major impact on the logistics industry and they expect it to continue to cause disruptions for some time, including blank sailings and truck/transport capacity constraints.
Shipping giant Hapag-Lloyd sent a notice to clients referring to what they call a “black swan†event. They say they are experiencing the strongest increase in 40ft demand, following right on the heels of one of the strongest decreases in demand ever – both happening within just 6 months. Almost 3 out of 4 of their 40ft containers are currently already being deployed and therefore not available for the time being.
Another of the top-5 shipping companies, CMA CGM Group, says it is striving to accommodate the demand and is implementing several solutions to buy, lease and reposition containers, while facing an equipment shortage in Asia. They add that their vessel fleet is also fully utilized and several ports are facing congestion.
Contact us here at Colless Young if you have any queries regarding container movements. We are licensed Customs Brokers and International Freight Forwarders. Colless Young is based in Brisbane and offers professional advice on trade, transport and shipping through all Australian ports and airports. Our services cover every aspect of logistics, including exports and clearance of import cargo through customs and quarantine, warehousing and trucking.
