The shipping and logistics industries have been hard-hit by a whole new crisis: a shortage of empty shipping containers. New buyers are struggling to find empty shipping containers on the market. The shortage of empty shipping containers first showed up in 2021, largely as a consequence of the pressure that the COVID-19 pandemic had put on the industry in recent years. But, what’s the reason for it to continue? Currently, options are few and far between if you are after an empty shipping container. Is there an end in sight for this shortage of empty shipping containers?
Why Is There a Shortage Of Empty Shipping Containers?
Aftereffects of COVID-19
The aftereffects of COVID-19 are still being felt in many industries throughout the world. Shipping and logistics make up just one significant chunk of industries still struggling from the aftermaths. COVID-19 restrictions cost large, medium, and small companies money. Some unluckier companies that could not take the strain were forced to close shop. The pandemic placed added strain on the supply chain industry as a whole. This includes increased consumer demand which has led to the shipping container global shortage that is going on today.
Demand for Shipping Containers
Due to the increase in global shipping activities each year as businesses expand and consumer demand increases, the demand for shipping containers continues to rise. Heightened demand has a lot to do with the shipping container shortage that is apparent in the industry right now. Today, obviously, there are more active companies out there today than there used to be five years ago. Along with the added pressure on the global supply chain after COVID, the heightened demand for shipping containers has been a big contributor to the shipping container shortage.
A rise in Material Costs
Similar to many other products, raw material costs for shipping containers have gone up in recent years. The shipping container industry is in a constant ebb and flow – and you can imagine it as a mirror-image of the stock market. Shipping containers don’t cost the same every week, and the rise and drop in the cost of materials will also affect the supply. At any point in time, a change in the cost of materials can swing the cost of containers. When the cost of containers changes, so will the demand.
Amount of Containers in Storage
Let’s keep in mind that the number of containers on the market also includes the number of shipping containers that are being stored somewhere. Empty storage containers exist all over the world in ports and docks, though they are not being used. Typically, these shipping containers in ports and docks cannot be bought. A stored, empty container cannot be bought for the same reason you generally go to a car dealership instead of walking up to the model you want in a parking lot to buy it. While anything on wheels might be charged to park, the same is true for shipping containers. Shipping containers are charged port storage fees when they are parked somewhere. Not to mention, they already have an owner even though they are parked.
Higher Demand for Shipping Containers
There is a higher demand for shipping containers not being used in the shipping industry. Instead, more and more people are recycling shipping containers and finding other uses for them. While this can be seen as a good thing for benefiting industries, it does mean that there have been fewer empty shipping containers for the to transport goods. Higher demand has led to the need for a whole industry to adapt, and it’s taking a while for it to catch up. Additional Information: “Impacts of Shipping Container Shortages, Delays, and Increased Demand on the North American Supply Chain”
The Junction LLC | Truckload Shipping
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