How Covid-19 Effected Global Shipping Container Trade
The ports in China are continuing to be congested and immobilized to ship and receive shipping containers on a daily bases causing maritime corporations to scramble and update inventories of their current stock of intermodal conex boxes globally.
Most mega vessel sailings to China have stopped causing a dramatic break of unbalanced utilization of equipment in which shipping containers are in the highest demand for exports and localized container sales. The only resolution at this time is to carefully make a practical use of existing TEU wherever it sits and provide NVOCC's / Freight forwarders with containers needed to fulfill bookings to avoid empty sailings. Steam Shipping Lines cannot simply continue sailings with just enough allocated spaces on this ship to cover the fuel costs.
Labor Force not Meeting Shipping Container Demand
The lack of labor available at the terminals in China slows down the availability to off load containers from ships and vice versa. Most retailers will tend to see a reduction in available products and lack of inventory. The slow down of processing shipping containers at the ports causes issues with refrigerated containers and the perishable produce that they carry which in turn effects the export and import of agriculture. The ripple effect of these events directly causes delays and back ups for intermodal carriers, warehouses, container depots and maritime operators.
The container factories in China are currently only building new containers at a fraction of their normal manufacturing rate. The slower pace and delay postpones the release of new containers and increases the demand for new production arrivals that would have otherwise already been on the ground. Factory workers are operating in quarantined spaces with added security measures per station to avoid the spread of the coronavirus. The added costs of isolating individuals and workstations on the factory floor increases the bottom line for each shipping container built making for a more expensive one trip container for sale in the coming quarters of 2020.
Where are Container Prices Headed
With the current events taking their course, the demand for shipping containers has increased to be used for other routes while containers sitting at ports are awaiting their turn to be dispatched and returned at a slow pace. The overall container sales availability has shrunk considerably raising the prices of shipping containers nationwide. Most of the new production containers are already priced 10% – 20% higher directly causing the cost of used shipping containers to climb inadvertently. As shipping container inventories continue to diminish the available boxes on the ground become more valuable and harder to attain.
