Don’t worry – the widely reported global shortage in shipping containers isn’t going to last forever. They are still being manufactured and no one is destroying them or stockpiling them to create an artificially high level of demand. That said, there has been a problem in obtaining nearly all classes of shipping containers over the course of much of 2021. The bad news is that this looks set to continue for a little while longer before international supply chains begin to normalise. So, what is going on and what additional plans should you make if you are organising consignments that would normally be carried by the intermodal shipping container system? Read Barrington Freight’s guide to the crisis to find out.
Why Is There a Shipping Container Crisis in the First Place?
To put it bluntly, you could sum up all the reasons for the current dearth in the ready availability of shipping containers in a single word – coronavirus. In other words, it is not so much that there is a lack of supply in containers but those which would normally be becoming free for their next shipment are currently in transit. What’s more helpful, therefore, is to get to grips with the reasons behind this.
Firstly, as has been widely documented, the pandemic caused slowdowns in many of the world’s major economies. This includes China which is, in many regards, the centre of the globe’s manufacturing industries. In turn, this means that China’s ports are also the hub of the international shipping container freight industry. With significant lockdowns in China over the course of 2020, as well as slowdowns in the economies of India, the United States and Europe, so containers were simply being shipped in smaller and smaller numbers.
Although forward-thinking businesses might have planned to hold some additional stock, with such a prolonged period of ports lying idle, they eventually ran out. On top of this, there has been an increasing level of demand among both consumers and businesses for online ordering during the pandemic. The result of these two factors – the need to restock quickly and the upturn in direct international ordering – meant that there is now a significant level of pent-up demand. As a result of this demand, both LCL container shipments – which only take up some of the space in a container – as well as FCL shipments – which stands for full container shipments – became hard to come by just as lockdowns started to end, especially in North America and Europe.
On top of this, there was a blockage of the Suez Canal in March of this year which delayed many of the world’s consignments heading from East to West and vice versa. The situation in the Pacific Ocean is much the same. As the economies of Mexico, Canada and especially America began to pick up, so vast numbers of shipping containers headed out from China only to have to queue to enter some of the continent’s biggest ports. Simply unloading such a great deal of cargo took longer than expected as, with port workers often having to self-isolate, normal operations could no longer be maintained.
Throughout 2021, shipping containers were ending up in places like Los Angeles in increasing numbers. Where they needed to be was back in China or, at least, heading back across the ocean to the Far East. Although less severe than in the Pacific rim, the situation with shipping containers in Europe is much the same. The simple way to put it is that the pandemic caused huge disruption to manufacturing businesses in all parts of the world. Because usual shipments were not being made or were delayed and because demand for containers spiked so much, they ended up being in the wrong places.
Of course, the global shipping industry is sorting this situation out with many smaller consignments being handled collectively by LCL freight, for example. The world’s shipping containers will eventually be redistributed around the globe so that order is restored. However, this is an ongoing project that will take time, especially as demand continues to peak and trough. In the meantime, what can you do to ensure your business is not unduly affected by the current distribution of the world’s shipping containers?
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Consider Your Shipment Choices in Advance
Planning is often the key to overcoming a crisis and the more businesses can predict their demand, the better position they will be in. For some, this will mean booking LCL shipments in advance, perhaps with other businesses that are also importing goods and components from places like China. At Barrington Freight, we are ideally positioned to help British firms make the most of LCL shipments from the Far East so that their goods arrive in the UK within reasonable time frames.
Of course, the other side of the coin is to order more than you might need at the moment so you can better cope with future delays or rising shipping costs. It is, therefore, worth asking us about upgrading an LCL shipment to an FCL one by simply purchasing more from your Chinese suppliers with your next procurement. Doing so may mean being able to secure a better price now than what it may be a few months down the line given the inflationary pressures many businesses have seen, especially those which import consumer goods from China.
Bear in mind, too, that planning your supply chain in advance isn’t your only option. Businesses that respond to micro niches and short-term market trends don’t really have the luxury of always being able to plan, after all. In such cases, especially when high-value consumer items are being imported, it may be more straightforward to avoid the container crisis entirely by opting for airfreight instead.
Again, this is something that Barrington Freight has a great deal of expertise in that you can benefit from. This is the case whether you are looking to air freight as a potential solution for imports from China or other parts of the world, such as India, North America or the EU. Certainly, it would be worth talking to us if your aim is to get your stock procurement carried out before Christmas and consequently need your imports to be with you before the festive season kicks in.
Why not call us whether you are after more reliable LCL and FCL imports from China or simply want to know how much more you might need to budget to obtain an airborne consignment to the UK?
