Worldwide Container Shortages
Global container shortages plague shippers worldwide as cargo surges into the U.S. from Asia. While we at TOC have been able to mitigate these issues and provide equipment in recent weeks, the problems aren’t short-term hiccups. Despite our strong carrier relationships, we expect the shortages to last until the end of November 2020 as carriers play catch up with cargo that was rolled due to blanked sailings and to make room for PPE shipments during the summer.
As retailers work to restock languishing shelves, massive shortages of equipment in Shanghai and Ningbo cause shippers to miss bookings because no boxes can be found for loading even if vessel space is available. This is not an issue specific to a single carrier or trade lane; instead, it ripples across the supply chain and impacts equipment scarcity in the United States. Massive congestion on the west coast causes delays as containers face a bottleneck getting out and back with turn times up 21% this month.
The problem extends to China as well, where we have been informed of the following key conditions which are further exacerbating the problem.
- Owing to the predominantly eastbound flow of cargo from China, carriers have opted for smaller, more frequent vessels. This means an increased number of calls by vessels carrying fewer containers, occupying and congesting valuable berthing space.
- The option to manufacture an additional supply of containers isn’t available to shippers seeking to put more equipment into the trade. According to a story in FreightWaves, container manufacturers are sold out through February of next year.
- These two factors, coupled with record trade deficits which show the increasing imbalance, are causing routine delays of 3-4 days with some running, on average, 7-10 days. Delays are now so commonplace that lines are unwilling to provide letters to this effect which could be passed along to shippers as evidence of the problems.
2020 seems to be the year of coining terms to describe what is happening in the market. With this in mind, some are positing that we’ve moved past “the perfect storm” to now “shipageddon.”
TOC has contracts with multiple carriers, the goal of which is to offer multiple service options to our clients including port pairs, sailing schedules and transit times. The messaging we are receiving from our three largest partner companies and groups is identical, which gives credibility and underscores that it is not anecdotal or a problem for one, but instead is a challenge for all.
We strongly encourage everyone to request equipment as far in advance as possible to give us enough time to try and procure it. Being flexible with sizes and configurations, loading times, or routings may help us find a solution that still suits your supply chain. We wrote recently about diversions and the ability to terminate or redirect a shipment in transit if it becomes critical. While not readily available and easy to accomplish for all shipments, shippers would be well served to have an understanding of the overall costs involved in this or even plan for shipments of air freight to fill potential stock or inventory vacancies for the most critical of items.
WE’RE HERE TO HELP
Our capable and experienced team is standing by to assist organizations and supply chains across the globe. Click the button to get in touch with our team.