The humble shipping container has a new status in the COVID-19 pandemic: hot commodity.
Shortages of the ribbed steel boxes that have plied the global economy for a half-century are plaguing transpacific routes in particular. The dearth is boosting the purchase price of new containers and lease rates by 50%, snarling port traffic, adding surcharges and slowing deliveries heading into the holidays.
A surge in Chinese exports and robust consumer demand in the U.S. help explain the tightness, and major shipping liners such as Hapag-Lloyd AG are scrambling to reposition their bigger 40-foot-long containers from less busy parts of the world. Nico Hecker, Hapag-Lloyd’s director of global container logistics, dubbed it a “black swan” moment.
The current scarcity means importers are facing longer waits for their goods and might pay extra fees to secure the transport equipment. The impact can ripple beyond the flow of goods between the world’s largest economies.
“The more profitable the China-U.S. lane becomes, the more incentivized carriers are to divert containers from other lanes, increasing the prices on shipping in secondary markets,” said Eytan Buchman, chief marketing officer at Hong Kong-based Freightos, an online shipping marketplace. “Historically, this has been a driver of higher intra-Asia rates, with spare containers located in Asia diverted to the transpacific route.” The estimates show that container shortage may remain through at least Chinese New Year, in mid-February.
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By: LFS Marketing
November 13, 2020
