With the surge in Asia exports, the world’s largest container manufacturer is working overtime to keep up with demand. Many analysts warn that despite the box builder and the carriers’ efforts, equipment shortages are expected to persist into January, possibly even further into the first quarter of 2021.
China International Marine Containers (CIMC) - a subsidiary of China Cosco Shipping, said last week they are working double shifts in an effort to keep up with demand. CIMC currently manufactures almost 60 percent of the world’s general purpose containers today.
Although the carriers have been working to aggressively reposition empty containers, the demand has also made it necessary to acquire more. In just in the past six months, Maersk has said they have grown their fleet by almost 10 percent and expects to grow another two percent in 2021. Hapag-Lloyd has grown their fleet by eight percent and CMA CGM also increased their fleet by almost nine percent this year.
For most carriers, vessel capacity is completely utilized for every sailing. Sailings are fully booked months out, which has left little excess capacity and pushed spot rates to new heights. The Chinese Ministry of Transportation and Communications has taken several steps to encourage carriers to cap rates and inject more capacity into the trade. Ministry Spokesperson Gao Feng was quoted this week as saying, “Based on the preliminary work, we will work with relevant departments to continue to promote increased capacity allocation, support to accelerate container return, improve operational efficiency, support container manufacturing companies to expand their production capacity, while increasing their efforts to monitor the market, strive to stabilize market prices and provide strong logistics support for the steady development of foreign trade.”
Despite all efforts to grow their fleet, analyst Drewry said that the global container fleet will actually decline one percent, indicating that container shortages are actually a result of positioning issues rather than a lack of equipment.
The unprecedented demand has caused severe congestion at ports in both Europe and North America. While steps are being taken to resolve congestion, the amount of volume has all port stakeholders stressed, including carriers, terminals, warehouses and truckers.
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