Not a lot of people understand the importance of shipping containers. They’re just large, steel boxes stacked together or on huge trucks. These containers actually carry tens of thousands of pounds of cargo. Aside from trucks, they’re also transported via trains and ocean freight ships.
Lately, the shipping container shortage has been a global problem plaguing the shipping industry for years. It has disrupted the supply chain and threatened the global economy. The problem stems from an increase in demand for goods. As more people buy goods, more containers must be manufactured and transported across the globe.
Due to high costs and low margins, there aren’t enough containers for increased demand. Businesses must pay higher prices or wait longer than usual for their shipments to arrive.
What Contributed to the Shipping Container Shortage?
The shortage was caused by numerous factors, starting with the demand for new containers, which has increased due to industries such as e-commerce growing rapidly over the past few years.
Many older containers are also no longer suitable for use because they were built before regulating bodies put modern safety standards into place. These old containers are now being recycled instead of being reused.
The pandemic is a factor as well. It undoubtedly rocked society to its core affecting every aspect of life, including shipping. Regardless of the industry, the situation has made it difficult for shipping companies to operate, but as restrictions loosen, shipping companies are bouncing back.
The loosened restrictions influenced the higher demand for shipping since many people can now buy international products. Most industries are still recovering from the effects of the pandemic, posing some problems logistically.
What Are the Stats Saying?
Recently, there have been major changes in all facets of shipping. For instance, about 226 million shipping containers are transported annually. Additionally, because of the high demand, container prices continue to rise.
It doesn’t help that COVID-19 has forced businesses to limit operations, with over 815.6 million 20 ft. units congested in ports during the beginning stages of the pandemic.
One of the biggest problems companies face is unprecedented buyer behavior changes. To take advantage of competitive pricing, some buyers have begun purchasing from providers offering expedited shipping options at higher prices, which can lead to further delays.
The pandemic has also shifted the needs of several people, resulting in different buying patterns for services and goods. In short, the demand for goods has changed, but businesses have remained to have limited shipping options.
The future is uncertain. The pandemic taught everybody that some of the most unpredictable things can happen and can drastically change how people live as a society.
The shipping industry is no exception; things like lockdowns, supply, demand, and prices can suddenly change. Even the material restrictions can vary because of environmental reasons, so it’s always a good idea to be updated with current events.
If you’re someone who heavily relies on shipments, the infographic below breaks down recent statistics and provides feasible solutions businesses can follow to address this shipping crisis.