Why is There a Container Shortage in Asia and What can Shippers Expect?
Since the beginning of the Covid-19 pandemic, global supply chains have been struggling with container shortages all over the world. Notably in Asia, these shortages have caused inflation in purchase and rental prices as well as increased delivery times. With no resolution to the tightening availability in sight, let us take a more specific look at why the shortage has occurred and what shippers can expect in the months or years to come.
When the supply chain first became disrupted at the start of the pandemic, by the time ports began to reopen, a domino effect was already in process. To start, as Asia rebounded quickly and pushed to get the previously sitting loads out, by mid 2020, the rest of the world was still in lockdown. Because many consumers were sitting at home, US import volumes reached all-time highs as people shopped online. Additionally, congested US ports not equipped to handle such high volumes have caused many ships to sit with full containers at anchor for extended periods.
Even worse, when ships have been able to unload, there are no empty containers with which to reload. Today, we see many full containers piling up at waterfronts and at inland depots. Collected this has resulted in more ships full of containers leaving Asia bound for the US, than full ships leaving the US bound for Asia.
Moving forward, shippers can expect a continued shortage with increased container prices. Currently used containers are selling for $3,000 to $4,000 with new prices as high as $5,000, which is a lot higher than prices in the beginning of 2020. However, on the brighter side, industry wide transparency and rulemaking is set to help reduce the severity of the shortage situation by regulating container use and tracking. With that in mind, many experts expect shortages to ease by the start of summer.
In such uncertain times, instead of struggling to manage shipping logistics alone, let ClearFreight simplify your processes with state-of-the-art technology solutions as well as up-to-date industry news. Contact our team today to hear how our specialized supply chain solutions can help make logistics easier for you.