The recent blockage of the Suez Canal by the Ever Given container ship has shown just how fragile global shipping can be. But, this Suez incident was just one episode in the overall shipping crisis triggered over a year ago by the Coronavirus pandemic.
Perhaps the biggest obstacle to shipping now is the shortage of transport boxes (shipping containers). Even when these containers are available, their prices have increased to sky-high levels—from about $1000/each prior to 2020 to up to $10,000 now, according to the DW article: “Coronavirus Pandemic Triggers Shipping Container Crisis.”
Not only is there a shortage of shipping containers but there is also a shortage of available shipping space. The sudden and unexpected emergence of COVID-19 has led to unprecedented consumer spending on goods that the shipping industry was not prepared for. That increase in spending coupled with an inflow of stimulus funds to consumers in countries such as the United States, Japan and South Korea have help to drive the increased demand for goods. Further, the decrease in services spending i.e. to restaurants, hotels, and air flights has also freed up additional funds for consumer goods purchases. With all of these factors driving consumer goods spending, the shipping industry has experienced unprecedented increases in demand for shipments.
Now many shipping companies and container manufacturers are struggling to build inventory up to the levels required to meet demand. Further, any new shipping containers manufactured in China are first loaded with goods in China and used for one shipment before other countries can take possession.
With inventories too low and order backlogs at record-high levels, long lead times are likely to be extended throughout the year and possibly longer.
You can also learn more about the recent Suez shipping crisis mentioned earlier and what you can do to help guarantee your shipment.