The year 2021 will be defined by many strange events, but one of the most bizarre is the shipping container logjam that had defined the freight world over the past eight months, possibly best epitomised by the bizarre tale of the Ever Given.
Whilst it is characterised as a shortage, this is not necessarily the case, as you can buy a shipping container in most parts of the world with relative ease.
The issue is that there is a shortage of containers where they are needed most, as the remaining supply is in another location not being used.
Global logistics is an exceptionally complicated ecosystem that relies heavily on fairly tight tolerances. The rise and increased reliance on “just in time” logistics have led to highly efficient but vulnerable systems.
With every stage of a logistics journey arriving just in time to either be sold or enter the next step of manufacturing, any disruption to shipping would have major consequences that would reverberate for a long time.
In March 2020, this would be seen as several major shipping destinations locked down their ports for several weeks as world leaders managed their response to a global pandemic, starting with China and extending to the United States, the UK, Europe and the rest of the World.
Different nations chose a multitude of strategies to handle the public health crisis and China managed to see its export volumes recover by early 2021. As they were the first to be hit by the crisis they were also the first to recover, resuming imports and exports before anyone else.
As well as this, as people’s lifestyles changed as they started to adapt to working and living at home, this led to an increase in demand for luxury items such as televisions, exercise equipment and cooking utensils.
This led to a situation where one side of a supply chain was exporting more than they were importing.
This started to cause issues as it meant that the majority of shipping containers in circulation were in locations with congested ports due to a combination of more demand and fewer workers, causing increased shortages of shipping containers in the ports where they were needed to export goods.jhd
This issue was exacerbated by The Ever Given running aground in the Suez Canal, blocking one of the most vital arteries of the global shipping industry.
Not only did this cause major delays for hundreds of container ships with vast amounts of cargo, but accentuated an existing shortage of shipping containers, and increasing demand for containers that already exist and are seaworthy.
As well as this, whilst most ports remain open on some level, there remains a risk that positive cases could cause a shutdown of a vital container terminal, slowing down goods and causing issues with shipping container supplies once again.
Whilst demand is expected to continue for the next few months at the very least, one consequence of the current shipping container situation is that once the most acute part of the crisis has ended, there is likely to be a surplus of containers available at bargain prices.