Container shortages increasing in China
Equipment shortages are spreading to China, as the lines fail to reposition sufficient empty containers, with some lines diverting available empty equipment to more profitable trans-pacific trade lanes.
The container imbalance has become more pronounced since the spike in imports to the US and Europe, after lockdown ended and now carriers are unable to reposition sufficient empty containers in Asia.
The container shortages on the Asia – Europe trade is exacerbated as empty equipment is redirected to serve the booming trans-Pacific market, which means it is becoming harder to find all types of equipment.
With rates almost 200% higher than 2019, many carriers have begun to move empty containers from other Asia origins into China for the trans-Pacific trades and we are beginning to see equipment shortages spread across Asia.
Containers are a finite resource, and with US importers willing to pay the most for a container, many lines won’t move a container westbound when it can be moved on the US trades for up to four times the price.
The situation has been exacerbated because so many empties in the UK and Europe have been stranded after the carriers withdrew extensive amounts of capacity to match anticipated weak demand during and after COVID-19 lockdowns, leaving containers stranded at the wrong end of the supply chain.
Container availability varies by type and locations, with many in short supply across many Asian hubs. The situation has been particularly acute in Shanghai, Shenzhen, Ningbo, Dalian, Tianjin, Qingdao, Xiamen, and Fuzhou.
Our partners in China are doing everything possible to locate preferred equipment, by working closely with partner carriers and we would urge shippers to pre-book equipment as early as possible.
UPDATE – Trade observers this week noted that the US import surge has resulted in a 20% year-over-year (y/y) increase in capacity, which they think is not sustainable and could result in excess capacity in the eastbound trans-Pacific trade, but not until early 2021, which means that equipment shortages may persist for some time.