The global shipping container shortage of 2020 and 2021 is having huge effects on shipping and container prices. It’s causing delays in deliveries and increased costs for exporters. You may be asking why the shipping container shortage is so profound and how we ended up in this situation. Are you also wondering what’s being done to fix it?
Importance Of Shipping Containers In Global Trade
Freight shipping has found itself in an unfortunate situation with the current global shipping container shortage. However, it’s not only freight suppliers or exporters who are being affected.
Freight shipping is the lifeblood of trade. Almost every product that goes to market gets to the customer buying it through freight shipping. Products travel through the global economy by road and sea, and without shipping containers, they can’t move and get to the person buying them.
The shortage means there is a rise in cost for almost every product and part. The demand for shipping containers right now in 2021 is high, and some exporters are waiting weeks to find containers to send out their products, leading to considerable delays in shipping.
The scarcity of shipping containers increases the cost of shipping containers. The cost is then often passed back to the consumer as product prices rise to ensure that products are sold at a profit.
Why Is There A Global Shipping Container Shortage?
The global shipping container shortage has become a crisis. But how did we get to this point?
The problem is not that shipping containers have suddenly disappeared. Instead, containers aren’t getting to where they are needed.
The COVID-19 pandemic has fueled the problem. When the outbreak began in China, many of its neighboring countries and later on countries around the world went into lockdown in 2020. This lockdown led to the halting of the production of goods, which slowed economic growth.
Shipping companies lowered the number of cargo ships that were delivering goods and parts. Containers piled up, empty, and stuck in ports and depots.
Now that the supply chains have jumped back to life in 2021, exporters face a new problem.
Asian importers are bringing their goods to the US but then taking the containers back empty rather than filling them with goods from exporters.
One of the reasons for this is that empty containers can be shipped back to China and other parts of Asia more quickly than when they are full. They are then loaded up again with goods for export. This practice is more profitable for many Asian companies who want to meet the demands of overseas markets and capitalize on low freight rates.
Exporters Go To Congress To Tackle The Container Shortage
What can be done to bring down the cost of shipping containers? Well, the shipping container shortage needs to come to an end. Exporters know this and are petitioning Congress to intervene.
Congress is currently discussing taking the drastic measure of forcing global liners to take US export bookings.
The proposal asks for amendments to the current US Shipping Act. Exporters say that regulations need to be changed, and importing cargo ships should be banned from dismissing all export bookings.
The shortage has hit the agricultural industry particularly hard. The Specialty Soya and Grains Alliance (SSGA) says that agricultural exporters are suffering from the unreasonable practices of ocean carriers.
As the problem escalates, more US exporters will be pushing harder on Congress to step in and impose regulations that will stop this block in the supply chain.