Shipping containers. We know they exist, but many of us forget their role in allowing us to live our daily lives. It’s estimated that 90% of the world's goods are transported by sea. 60% of that is our fresh food, technology and appliances. The remaining is oil, gains and commodities. Without this transportation, the global shipping chain that we depend on will have to change.
Shipping containers are now the newest commodity, and their need has never been more apparent since the pandemic hit. But, as the aftereffects continue and aren’t expected to go away anytime soon, is a solution on the horizon?
How Did COVID-19 Affect the Shipping Container Industry?
When the global pandemic hit the world in 2020, the shipping container industry was unprepared for the commotion of what was about to come. With limited suppliers, labour shortages, a backlog of orders and lockdowns in place, the demand for supplies by consumers and businesses was rampant, as well as the shipping containers required to transport them. This lack of containers has had a domino effect on the entire supply chain, disrupting global trading as we know it. The rising costs and limited availability of shipping containers have highlighted the importance of cargo containers and how heavily we rely on them.
What Roadblocks are the Shipping Container Industry Facing?
In the last quarter of 2021, you’d assume the shortage of shipping containers would be an issue of the past with a vaccine now developed and international travel resuming. So why isn’t the shipping industry back to standard capacity? And is there any hope it will be regulated soon? Unfortunately, the issues that face the shipping container industry are multifaceted and aren’t capable of a quick fix.
1. No past solutions
The fact is that the current commotion across the global shipping industry is much worse than any issue the industry has seen before. Adapting to any problem or challenge that COVID-19 has created is extremely difficult. The scale of these unforeseen circumstances also means nothing is tried and true to base a solution on.
The industry is restarting from scratch and formulating solutions that haven’t been tested before to try and find ways to manage this crisis as quickly as possible.
2. Increased demand
While the shipping container industry typically adapts well, the pandemic has essentially thrown a spanner in the works and broken down the system and its structures. Between the 25 million containers used worldwide, making 170 million trips each year, the system is a complex, large and delicate service that interweaves with multiple industries worldwide.
The system in place to control this massive industry has essentially been disrupted like never before. When there is a decrease in labour and influx in consumer purchases and need for supplies, the shipping container industry cycle becomes disrupted, ultimately causing delays. While this issue is not exclusive to behaviours specific to the pandemic, it has exacerbated it.
3. Port congestion
Port congestions do regularly occur but have been accelerated by the pandemic. The early stages of the COVID-19 Pandemic saw a decrease in online shopping behaviour. Understandably, people were worried about their jobs, and COVID-related uncertainty drove consumers to hold off on non-necessity purchases and prioritise food, hygiene, and cleaning products.
Whilst adopting a frugal lifestyle has its benefits, the shipping container industry had to reduce its cargo to match supply and demand. This shift saw the industry significantly decrease the usual flow of imported and exported goods.
As we stuck out the pandemic, a resumption of online shopping and even over-purchasing to cope with the loss of normality drove the demand for containers to increase. As a result, containers once lying empty were now congesting ports, rendering them inaccessible for business.
Pandemic cases, restrictions and lockdowns inevitably affected staff levels, which saw containers rapidly stack up. Stricter restrictions and border control also amplified this congestion, which can be blamed for containers staying out of action.
Despite the industry’s overall performance being at its lowest in ten years, there are some signs that performance will improve. Shipments reaching their destinations on time began to improve this April, improving the average delays.
Sufficient in carrying out shipments by sea, the container industry still relies on other industries to deliver goods, especially trucks. With a shortage of truck drivers available during the Pandemic, combined with bottlenecks at ports and rail stations, warehouses were being forced to refuse delivery on new containers until backlogs were reduced. As a result, containers required longer to be uploaded and weren’t readily available to be shipped back to ports, primarily in Asia, which service exports to most of the world.
The Future of the Shipping Container Industry
The consensus within the industry is there is a need for a market reset and a decrease in consumption. Yet the combination of limited truck drivers, reduced warehouse space and consumers increasing their spending on goods whilst travel and entertainment is still reduced, a slow resolution is expected.
With multiple COVID-19 related factors contributing to the limited availability of shipping containers, naturally, there isn’t one straightforward solution. While some measures are underway to help resolve the deadlock contributing to the shortage, we will not likely see the global container shortage crisis returning to normal for the coming months or well into 2022.
What is being done to fix the shipping container shortage?
As the demand for containers can’t currently be satisfied, with available containers being booked immediately, there are some measures the industry providers are taking to improve supply.
Some of these measures include:
- Carriers attempting to reduce free time and detention period
- More efficient unloading systems
- New booking systems that can coordinate air and sea freight to reduce the backlog of empty containers.
- Decreasing the consumption of goods
- Implementation of more medium-size vessells
While these are not a quick fix, these measures can assist in alleviating the shortage, acting more as a preventative measure to stop this shortage cycle from continuing.
How Tiger Containers Can Help
Surviving in a post-pandemic world is not straightforward as the everyday lives we were accustomed to have changed. While shipments have taken longer than pre-pandemic, know changes are on the horizon to assist with getting the industry back on track.
Contact Tiger Containers to learn more about the shipping container industry or purchase or rent one for yourself. As one of Australia’s leading suppliers of quality shipping containers, we make it our business to provide the best quality services and competitively priced containers.