What creates container shortage in the Shipping Industry?
Container shortage in the shipping industry has a huge impact on import and export costs that affects consumers severely as the prices are skyrocketing. COVID-19 has played a huge role in the shortage as the whole world went into lockdown rendering the shipping industry stop along with other services. But the pandemic only is not the sole culprit in all the situations, as there has been a shipping container shortage before COVID-19 arrived.
Sometimes when the shipping units go on the voyage, they become part of some chaos, and due to various reasons, they go missing. This not returning on the time is the reason that leads to scarcity. And here we are not talking about one maritime shipping container. As I am writing, more than 50 million shipping units are currently traveling. So, you can imagine what will be the scenario if any of the ships carrying the boxes go missing or find themselves in some difficult condition.
We will look in detail at the reasons that are making the shipping containers fall short.
Covid-19 break out
In 2020, COVID-19 hit every business sector severely and the shipping industry was one among them. The effect of the pandemic is going down as the world is continuously working to free itself from the clutches of the pandemic. While other industries are getting back on their grounds, the shipping industry is still struggling with the shortage of boxes. There was a huge imbalance between demand and supply due to inconsistency in imports that resulted in fewer freight containers available for exports. The containers were scarce during the recovery phase as millions of containers didn’t travel due to the closure of different ports.
Sterilization takes time
The key step in battling from the pandemic is sterilizing everything before using it to get safety from the virus.
You might be thinking sterilizing is easy, how come it garners in shortage?
The answer will awe you as sterilizing hands is an easy task but sterilizing mammoth-sized ships and metal shipping containers is a challenging task because of their huge size it takes a lot of time to fully sterilize them. This process whereas keeps us safe but delays the import and export of containers thus manifesting in a shortage of boxes.
Reduced number of ships due to COVID
The shipping industry is trying to get back on track after the pandemic. But still, many ships have not started carrying boxes due to onboard COVID cases, refurbishing, or some other reasons. This situation was also the reason behind the shortage of storage containers.
The largest ports or small are congested due to various reasons like yard becoming full so ships cannot dock, which can happen due to several reasons like bad weather, too many ships in the port or terminal, lack of port handling equipment, and others. Container shortage also plunges when the truckers come to pick up the boxes and when the terminal is already full due to other truckers they cannot get the containers on time which leads to the same scenario. Container scarcity is also when there is a lack of workforce or people. This happens during cargo container loading and unloading from the ships when they dock on the ports. But when fewer people are there, they will take time in emptying or loading one ship. And the resultant is ultimately shipping unit shortage.
Changed behavior of people in buying goods
People’s behavior of buying goods changed. The merchandise like masks, sanitizers, PPE kits, and other such equipment was not needed by common people before. Also, because the pandemic is causing more and more people to work in home offices, huge quantities of office chairs and desks as well as webcams and other technical equipment. So, more people are purchasing such items, most of which is manufactured in Asia and then sent around the world. But with the advent of the pandemic, they started investing in such items. The containers that were carrying less used items were rendered useless and took all the space. This all chaos led to the container shortage in the shipping industry. The business people are now trying to make a balance between lean services so that they never have to see the shortage again.
Containers being held up
There are many times when containers get held up at the ports due to various reasons. And then demurrage and detention charges really start to hit. Especially so-called carrier-owned containers (COC’s) are objects of high detention and demurrage charges. This is a reason why a lot of market players switch to SOC or shipper-owned container. This is also one of the main reasons for the scarcity of shipper-owned containers at the moment.
The person doesn’t turn up
Yes, you read it right. There are many cases when the person responsible for unloading the cargo doesn’t turn up. The container depot services, try to contact the person but when they don’t get an answer the container is sent back. This whole process can take months leaving the containers to be wasted for longer durations when many consumers are lining up to buy new containers or get used containers, going empty-handed.
Weather can be at fault
Weather plays a main role in the container shortage as for shipping boxes, we use intermodal transportation services. But mostly the shippers choose ships as the most favorable ones due to their huge capacity. And during the journey, many times ships get stuck due to bad weather and with it get stuck the boxes.
War or border issues
During ongoing war or border tension-like situations, the countries close the borders and don’t allow any containers from that country. This also leads to container shortage in the shipping industry as they can’t cross the borders.
Many other issues lead to the shortage of containers. The most recent one is when Ever Given, a Japanese ship got stuck in Suez Canal for six days making thousands of shipping containers sit idle for six days thus blocking the global supply chain.
This scenario is no new. Once in 1967 also, fifteen ships got blocked in Suez Canal due to the war between Israel and Egypt. At that time also a huge number of containers got stuck with the ships.
The container shortage is not new and unmanageable. With the right management, one can avoid the scarcity of boxes. We all know that imported cargo containers are sent for exports and this is an ongoing chain. If something happens at any of the ends it will lead to a deficit of containers. There are many companies that successfully handle container shortage issues.
BOXXPORT is one of them. Being one of the leading open marketplaces we have an abundance of various types and dimensions of container availability. We match you with the vast number of container buyers or suppliers to help you provide with best shipping solutions. You can take our services by sitting at home as every process happens with the click on your personal device. We offer transparency in the transaction and save you from all the hidden charges. You can track all the proceedings as our services are in real-time. So be stress-free as with BOXXPORT you are never going to see the container shortage.