Container Shortage Impacts Global Trade
Another Pandemic Victim: Storage Containers
Over the last year, we have witnessed historic shortages because of the COVID-19 pandemic, from cleaning supplies to toilet paper. Food shortages left shelves empty throughout large grocery chains. One shortage that you may not have thought of in the past year is the global shortage of containers that helps to drive the supply of goods to the consumer. This shortage is continuing to harm the supply chain and is being felt by internet retailers and is putting increasing pressure on overseas markets.
What caused the shortage?
The pandemic changed the way that consumers found and bought their goods. When stores began shutting down, internet retailers became extremely popular with ordering and delivering merchandise of all kinds. Three key factors played into the container shortage. First, consumers went online to buy their merchandise, including the need for new in-home office furniture. Second, the global demand for masks and other personal protective equipment skyrocketed and put more pressure on the container industry. Finally, manufacturing plants were shut down because of infection rates and absenteeism, especially in China. Asian companies seemed to be hit the hardest and this increased delay times with merchandise and goods coming from Asia. Parts of Europe have felt the impact of this as well.
How has this shortage impacted trade?
Trade coming from China and other hard-hit Asian countries has been extremely delayed. The shortage has contributed to recent inflation costs. Even though production is finally increasing from the pandemic-induced delays, it just still isn’t enough to combat the demand. Even the price of the containers themselves is affected by inflation. The price has almost doubled since the beginning of 2020. Another problem has been getting used containers back to Asia to be restocked and shipped out again because of the increased tightness in the transportation market. All of these issues combined continue to drive inflation on a large number of products.
Is there an end in sight?
Many are hopeful that with the rise of vaccination rates, the infection rate of COVID-19 will decline, and ease up some of the transportation market restrictions. When this happens, more used containers will be able to make their way back to Asia to be restocked and shipped out again. There are disagreements about when this might happen, but some are optimistic that the demand may begin to subside by the end of this year or sometime next year.
Contact us today to learn how R&A Trucking Company can help with moving your product and navigating through this container shortage.