Full Ports, But a Container Shortage?
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Containers have never been more in the news than they are now. Port delays, supply chain problems, trucker shortages, how do you make sense of it all? Why does that mean there is a container shortage? Let’s dig in for some answers.
60 Minutes did a great job this week really digging into the whole process. They looked at everything from the ships sitting in the ports to containers being unloaded, moving by truck, by rail, delays in getting at containers that are delayed.
You can see more about how the congestion really is a bottleneck that is compounded by too many ships, too many containers trying to come through a system not designed for this much traffic. There is more detail on that on this article here.
Port of LA from the “60 Minutes” program aired Nov 14, 2021 on CBS.
But if there are all these containers coming into the US, then why are there no containers for me? That is because for all of the bottlenecks going on, those containers are in incredibly high demand. Depending on where the container is in its lifecycle and where it is physically when it is emptied out, different things will happen to it.
Shipping lines will normally use a shipping container for 7-14 years before they sell it. So even though you may see a stack of containers in a yard near a port or rail yard, that does not mean they are for sale. They are more than likely being stored so they can be filled with another load of goods and sent on their way again. The vast majority of containers are dealt with this way. Sometimes shipping lines will lease containers from shipping lines and use them for the duration of the lease before returning them to the leasing line. At the end of their lifecycle, either when the lease is up on it or it is when the shipping line decides to sell the container, then the container will be sold.
Right now containers are all spread around in all the wrong places. There are not enough containers in China to fill the demand for exports there to fill the need for goods being shipped to the US. Shipping lines would normally send empty containers inland to use them for US exports being sent out. Instead, they are sending them back to China to be refilled. This is creating a shortage of containers inland for companies trying to export their goods overseas. Between the delays of moving containers inland and high prices for containers in China, there is very little incentive to move more containers inland for the time being. You can read more about it in this article.
The result is that we will still see containers along the coasts continue to be available, but the further inland, the tougher that availability continues to be for now. As this bottleneck of containers gets worked through. As things start running smoother and smoother, containers will start to working themselves into the right markets where they belong.
As this bottleneck works it self out, and things calm down, we will see the market correct itself. In the meantime, feel free to keep checking in with us on pricing and availability. We know that things are going up and down a lot right now. We’re watching trends, pricing and availability and doing everything we can to make sure we keep providing you with the best quality containers we can at the best possible prices.