There has been a demand for shipping containers since the advent of the covid epidemic. Due to the market’s low supply, the market has grown as customers fight for the few still available. The situation will remain the same in 2022, as the global commodity appetite continues to outpace available supply. Here are some of the causes why shipping container needs will continue to rise in 2022:
COVID Rebounds in China
To stop the virus from spreading, China took quick and adequate precautions. They could take possession of it much faster than any other country, allowing them to mount a strong recovery. China restarted much of its manufacturing and exports as many other countries increased restrictions and preventive measures.
Large volumes of commodities are sent from Asia to Europe and North America, as China is the world’s largest exporter. Despite the re-engaged tradelines, there were still limitations and disturbances in these locations. Slower handling and stricter customs rules caused a lot of congestion in the ports.
Furthermore, land freight was disrupted, resulting in even more stagnation. This resulted in a significant backlog of unreturned storage containers. The effect remains in 2022, and with container shortages, the demand rises.
Low Production of Shipping Containers
China produces the bulk of shipping container units. To make production more financially viable, they are subsequently packed with items and exported to other areas of the world. They are, after that, sold as a one-way container for warehousing or transformation. The problem is that there is a growing need for shipping containers, but producers cannot meet it. However, you can still buy shipping container of any type and size from reputable vendors who will handle everything for you. They are all available at a pocket-friendly price that suits your budget.
The company manufacturing the containers is trying to increase their working time enough to meet the increased demand following the outbreak. Due to the ruling governments’ lockdown to curb the situation, many factories were also forced to close.
At first, it was not a concern because container orders were down. The orders skyrocketed, coinciding with the lockdown lifting and the resulting workforce reduction. Due to the pandemic, companies have been operating at one-third of their original capacity, making them unable to meet the market demands.
Global Shipping Problems
In the past year, there have been many problems in global shipping. The leading cause of shipping delays is that several containers have been held up in ports where they were not meant to be. When several companies in China went on a lockdown, empty containers were left in Europe and the United States, unable to return because borders had been closed.
Regrettably, when the lockdown restrictions were eased in China, many countries in the world responded with their lockdown, preventing normal import and export. The exchange of shipping containers is very critical to the survival of the industry. Therefore, there are delays and shortages in stock because the containers have not been returned for re-exporting.
Traffic on Major Ports Globally
Thousands of container ships are waiting to offload at international ports in some of the world’s largest ports, mainly on the West Coast of the United States and in China. This backlog is expected to continue in 2022 due to the ports’ inability to process all inbound ships.
Congestion is a major element of the problem, as seen by the correlation between canceled freights and delays. Regarding vessel on-time efficiency, 2022 has continued where 2021 left off, with decreased rates of vessels staying on track and increased average delays for late vessels.
Massive traffic means that it will take a lot of time to get the shipping containers to the market. With the delays that continue to be experienced in the market, the demand rises because the available containers cannot meet customers’ needs.
The Suez Canal Accident Backlog Effects
Container ships have recently blocked the Suez Canal. Despite the lifting of the embargo, there will still be a delay of ships that must get through. Due to the time the passage was closed, the situation will take some time to resolve. Several operators avoid calls to European ports altogether to minimize waiting lists and disruptions in the area. Delaying the delivery of units to their final market only contributes to the container shortage.
Additionally, Leasing businesses are unwilling to sell their stock since container distribution is not as fast as before. The situation has had a knock-on effect on the used container market.
The container shortage is exacerbated by a decrease in air and land transport. This problem may have been solved in normal conditions by using air and land freight. However, global airline volumes have plunged during the pandemic, resulting in even more things being delivered through maritime freight. Trucking and other forms of land freight have the same problem.