Shipping Container Demands Outstrip Supply

 In News

Despite the recent news of shipping container prices easing since the pandemic, there still exists a shortage in the global supply of intermodal containers for logistical purposes spurred by the global shortage of transport ships, reported in an article.

According to Rolf Habben Jansen, Chief Executive Officer of Hapag-Lloyd to German weekly magazine Der Spiegel, there are hardly any reserve ships left.

“Many shipowners invested little in their fleets in recent years because they have not earned the cost of capital over many years. Nobody expected the high demand for shipping transport due to the pandemic. There will not be more ships in the short terms,” he said.

How the shipping container logistics industry works, said DW, is that these containers are almost never used for one-time transport and are instead part of a global system.

“New containers are loaded with goods in China and used for one shipment before they can be taken possession in Europe. As soon as the Chinese shipment is unloaded at port, they will be filled with new goods from Germany, for instance, and transported to Asia or North America. Anyone in Europe seeking to buy one (shipping container) can only get it secondhand,” the online news portal said.

It added, “rising prices are always a sign of imbalance. In this case, it is a sign of increasing demand (for containers or shipping space) with stagnating or even declining supply. However, for a year now, it’s been difficult to maintain the global timetables that regulate intercontinental shipping, as the Coronavirus pandemic, which began in early 2020, has continued to fundamentally disrupt global trade.”

The global shipping import/export industry also suffered a setback when the Ever Given, a transport ship traveling from Tanjung Pelepas, Malaysia to Rotterdam, Netherlands, ran aground in the Suez Canal for six days resulting in a backlog of ships traveling through the water expressway.

Jansen added to Der Spiegel that despite the Ever Given being freed, the story wasn’t quite over.

“The ships will arrive in Europe or Asia with a delay of one or two weeks. There could be further congestion there if too many freighters arrive in the major ports at the same time. The return trips will be delayed, and some will have to be canceled altogether,” he said.

For Annette Kruger, a spokeswoman for Hamburger Hafen and Logistik (HHLA), the Suez Canal blockage was just a small piece in the overall picture of global logistics plan that has gone entirely off the rails, report DW.

“Ship delays of two weeks – in some cases, considerably more – are a situation that HHLA, as a terminal operator, has had to deal with for months now,” she said. “Hardly any ships have reched the port of Hamburg on time since the beginning of the year. After the production in East Asia was ramped up again following the first Coronavirus lockdown and demand for shipping capacity increased significantly. Other factors included unfavorable weather during the winter months and, at the turn of the year, Brexit.”

DW added that the problem is not limited to ports, however, as the delays also impact other parts of the economy.

Kruger added that every import container that brings good becomes an export container shortly thereafter, transporting other goods around the world.

“because of the ship delays, managing export cargo is a particular challenge. The later the ships arrive, the longer the export containers sit at the terminal facilities,” she said.



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