When & Why Behind the Global Shipping Container Shortage

Before the invention of the shipping container in the mid 20th century, transporting goods and cargo was a rather tedious and labour intensive task. Despite the containers being simple, metal boxes, they have proven to be much more, making incomprehensible improvements to global trade.

As relatively simple entities built to fit and transport goods, their stability and reliability mean it can be easy to take them for granted. However, without them, we would not have the advanced supply chain we do today. While this is undoubtedly a positive sentiment because global trade is such a large exchange, any issues regarding shipping containers can be highly detrimental.

As relatively simple entities built to fit and transport goods, their stability and reliability mean it can be easy to take them for granted. However, without them, we would not have the advanced supply chain we do today. While this is undoubtedly a positive sentiment because global trade is such a large exchange, any issues regarding shipping containers can be highly detrimental.

While industries constantly go through ebbs and flows, we, unfortunately, see a deep and enduring ebb within the shipping container industry. The global shipping container shortage has been considered a byproduct of the COVID-19 pandemic and has been an industry-wide issue lasting much longer than anticipated.

Pandemic related lockdowns, shutdowns, and restrictions have significantly disrupted the global transport of freight and caused consumer demand to fluctuate radically. As a result, the accessibility of shipping containers is minimal, and the industry is struggling to function as intended.

Not only are the containers scarce, but workers are too. As a result, the unloading and loading at ports and warehouses and transportation of goods have haltered and consequently stranded approximately 3 million containers worldwide.

Who is Being Affected?

It has been established that the shipping container shortage matters. It affects what shows up on shelves, the state of global economic stability, and the functionality of the entire trade cycle. How does each stakeholder fall under these extensive categorical umbrellas, how are they being affected, and what will it take for things to return to normal?

Shipping Container Industry

As mentioned, the general self-sufficiency of the shipping container cycle means we often take it for granted. However, it is essential not to forget the hands behind the massive operation, including industry giants, employees, and manufacturers.

Specifically, industry giants like Maersk and Hapag-Lloyd have suffered major setbacks due to the container shortage. However, with great determination and perseverance, they have attempted to adapt their methods and processes to tackle these setbacks head-on.

Trading across the Transatlantic, Middle East, Latin America and Intra-America, Hapag Lloyd is one of the world's leading ocean carriers. Transporting over 11,8 million TEU per year across 257 ships, they function on a relatively wide scale. However, acknowledging the massive impacts of the shortage on their functionality, they adapted by modifying their container refilling and emptying times by 25% to optimise container use.

This includes adapting their containers for alternative uses that serve their company and stakeholders differently. For example, they experimented by turning reefer containers off to allow more dry goods to be transported and reefer containers to be situated properly back into the trade cycle. They also considered reusing old containers to cope with the demand influx.

Other companies within the industry are following in these footsteps and finding their own way to adapt. However, seemingly simple tasks like ‘maximising every inch of space within the containers’ are proving to be more complicated and mathematically challenging to achieve.

Shipping Container Industry

Consumers

Whether we like to admit it or not or even identify our own behaviour, the pandemic has massively changed the way we shop. While this is something we have slowly been managing throughout the pandemic, this container shortage and its effect on global trade is bound to cause additional aftermath influencing our behaviour again.

While we like to consider ourselves self-sufficient and independent in our own decision making, our consumer behaviour is heavily dependent on external factors. For example, the Christmas period and the combined risk of shipping delay meant consumers were ordering more goods before Christmas to ensure they were delivered on time.

Many Christmas products are produced in countries whose subsequent exporters are elsewhere, meaning that sourcing containers to distribute these goods is increasingly challenging. So not only is there the general delay from the external distributor, but the added delay is a result of the shortage of containers.

However, since the supply chain challenges have been exacerbated and existing since the pandemic’s beginning nearly two years ago, it is well acknowledged and at the top of most consumers' minds. While almost half of all shoppers expressed concerns for shipping delays before Christmas in 2021, over 57% still strongly prefer online shopping, proving that container demand is not likely to slow down anytime soon.

This could be attributed to habit, the hopes that ordering early enough will ensure they receive their goods or perhaps the belief that this crisis is a one-off occurrence. If consumers believe, like many industry giants, that the trade cycle will return to normal by next year, they are unlikely to change their entire consumer behaviour just to change it back.

To keep the supply chain moving, certain suppliers have been prioritising sending certain products over others if they are easier to fit in bulk in containers. While this serves the supplier economically and hopefully assists the supply chain, many consumers will be disadvantaged by this adaptation.

Ultimately, there is no simple answer for how consumers can overcome and adapt to this crisis. Generally, they are encouraged to shop early, acquire local goods, and adjust their purchasing habits until the delay eventually surpasses.

Consumers

Suppliers/Retailers

Global trade has meant that goods don’t have to be sourced locally, and consumers have become accustomed to various international products they would have otherwise been able to access. In this sense, shipping containers and world trade are the lifeblood of the current retail industry.

Now that the entire cycle has been interrupted, the corporate conglomerate, the retail sector, suffers. Specifically, Indian exporters trying to trade to North America and Europe face great delay times, where it can be up to three weeks even to gain access to a shipping container. British exporters trading with East Asia have also struggled with delayed shipments taking up to two months at a nearly doubled price.

Now that suppliers are struggling to access their goods, their trade focus has switched with the fear of running at a loss. They are generally less concerned with promoting flashy products but solely about keeping up with demand and getting the products on shelves. This is not exclusive to specific retailers, but every industry is struggling in its own way. So much so that the automobile and tech industries that rely on outsourcing parts are struggling even to produce their own products, let alone export and sell them.

Container manufacturers anticipated making 6.4 billion containers last year, which is more than double the pre-pandemic production, meaning raw materials such as steel and lumber are also becoming scarce. As a result, many world retailers like Ikea, Target, and Costco have resorted to acquiring their own containers just to keep their heads above water.

Suppliers

In Summary

Despite the shipping container being notoriously rigid and trustworthy, the massive global impacts as an offset of the pandemic have proven to be more powerful. This certainly doesn’t mean the container cycle and system need to be discarded to make something new, but changes need to be made.

Solving the problem isn’t as simple as ‘making more containers’, but understanding that all stakeholders hold different perspectives and subsequent reactions to the shortage. The world is collectively trying to catch up after everything was essentially paused or dramatically changed throughout the pandemic, so understandably such a massive industry like global trade is bound to cause some disruptions.

For more information on how the shipping container shortage can impact you or your shipping container requirements, contact the team at Tiger Containers today. This issue is big, confusing, and all-encompassing, so allow our industry expertise to help us make sense of it together.