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Boatlopnik

The Global Shipping Container Shortage Is Now a Surplus

As Black Friday and the shopping season draws closer, store
inventories are full, and shipping containers lay empty at ports
around the world.

By
Jose Rodriguez Jr.
PublishedFriday 1:30PM
Comments (19)
Alerts
Image for article titled The Global Shipping Container Shortage Is
Now a Surplus
Photo: Mario Tama (Getty Images)

Empty shipping containers are crowding shipping ports around the
world and creating an unexpected bottleneck in the global supply
chain. Not long ago, the shipping industry was facing a shortage of
steel containers, but a downturn in demand for goods and a looming
economic slowdown have turned that shortage into a surplus, according
to CNBC.

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The ubiquitous steel boxes are now taking up precious space at
container depots, which are either filling up or already full. The
containers themselves are sitting empty amid a decline in global
consumer demand per CNBC. It's an unusual situation, especially this
close to a usually frantic period for the industry; the holiday
shopping season is just a couple of weeks away, and in past years,
this is around the time shipments would ramp up as stores replenish
their shelves and inventories.

Image for article titled The Global Shipping Container Shortage Is
Now a Surplus
Photo: He Huawen/VCG (Getty Images)
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But the opposite is happening this year, and retailers are reporting
that they already have enough inventory. Many stores are reluctant to
order more goods than they have on hand, which is good for buyers
looking forward to discounts that sellers will inevitably resort to
in order to clear out inventory. But it's not so good for global
freight: traders and shippers are giving containers away to reduce
crowding at some ports, and are skipping stops at other ports
altogether.

It's not clear exactly what "giving containers away" means, but it's
not very likely that it actually means ports are handing out
containers. Sorry, tiny home enthusiasts and Tron: Legacy fans. It
probably has more to do with giving away container space for cargo.
The dramatic drop in container costs isn't far from free container
space as it is, since prices are down by 73 percent compared to last
year's peak: rates are now at $2,773 per 40-foot container.

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And even though it's still early in November, 14 percent of stops
scheduled through the beginning of December have already been
cancelled along major shipping routes. This is known as blank
sailings, as CNBC explains, and is one of the ways shippers and ports
are hoping to avoid heaping even more empty containers at the depots
where they wind up after being unloaded. There's just nothing to
unload lately, nor anything to load them up with as buyers shy away
from stores. Other ports, including the Port of Houston, are now
charging fees for empty containers left at depots for longer than
seven days.

Global shipping giant Maersk says that freight rates peaked during
the global pandemic and are now steadily declining. The shipping
major warned investors that profits are going to fall in the next
coming weeks. Who knows? Maybe at some point there'll be so many of
these boxes at ports that we can all start planning our free tiny
home projects modeled after Flynn's container home.

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Image for article titled The Global Shipping Container Shortage Is
Now a Surplus
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