For many of us in the transportation business, containerized shipping is top of mind year after year. But for everyone else, it takes unusual current events to bring containers into the limelight. On that front, 2020 and 2021 have not disappointed: From supply chain issues affecting durable goods, automobiles, and toilet paper, to the container ship Ever Given getting stuck in the Suez Canal, the past two years have brought more than their fair share of container news.
The main event currently making headlines is the unprecedented and sustained container shortage playing out around the world. From where we stand now, our industry may loom large in daily conversation for most of 2021 — and possibly even longer.
The set up to this record-setting shortage and boom was complex. A slightly lowered 2020 container demand forecast at the end of 2019 meant that manufacturers were preparing to downshift. Then, with the arrival of the global pandemic during the first month of 2020, all supply chains were impacted, and the world’s container fleet moved off of its usual routes. Simultaneously, China locked down and went to zero manufacturing capacity, including containers.
As drastic as the initial impact was, the supply and demand slowdown for containers lasted only weeks. By spring, China’s manufacturing was back on line, and the world economy began to show signs of life. By mid-2020 many economies had staged a powerful comeback, and container shipping began to benefit from high demand and inefficiencies caused by unusual patterns. According to recent reporting by Bloomberg, manufacturers have been playing catch up ever since.
Today demand remains high, even as container manufacturing capacity is maxed out. Meanwhile, lingering inefficiencies and imbalances make for longer than typical transport times, requiring more containers in the total shipping system. As a result, container supply is tight and freight rates have skyrocketed. Many think the conditions for a continuing container boom will last through the rest of the year, and possibly even into 2022.
Regardless of the news cycle, CAI is always focused on containers and our customers, and we stand ready to help move your business forward. Contact CAI today to discuss your container needs and let us help you navigate to success.