How Covid-19 Effected Global Shipping Container Trade
COVID-19 Causing Breaks in the Logistcs Chain
The coronavirus has effectively caused a disruption in the global logistics aspects of container shipping and equipment trading worldwide. 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.
The economic effect of the interrupted daily operations of international trade will only begin to damage the global economy in the coming months. The reveal of quarterly financial losses provided to share holders will furthermore shake up the markets and cause a dramatic blow to the economy. China is not able to export or import goods at the volumes they are commonly use to causing a trillion dollar logistics industry to downsize and report losses. The fact that exports in Asia are down significantly effects the shipments on all other continents including North America. This comes at an inopportune time during which USA and China had begun easing up on trade deals.
Labor Force not Meeting Demand
COVID-19 has been able to keep the large margin of workers from being able to come back to work and continue port operations. 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 shipping 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 coming into the United States in the upcoming 6 months 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.
As efforts continue to control the outbreak of the coronavirus the economic toll the pandemic has caused will surely take some time to correct itself. In the meantime containers will hopefully gradually restock themselves where needed across the country. Just because shipping container stocks are low doesn't always mean prices should be very high. For the best rates and availability contact a reputable shipping container sales company.