A critical shortage of shipping containers is boosting cargo fees and sending shockwaves through global supply chains.
We know what you’re thinking — and no, you can’t blame this scarcity on hipsters using them to build tiny houses…
So what’s going?
The pandemic disrupted normal trade patterns
While some regions were in lockdown, others opened back up quickly, causing an imbalance in commerce and a host of ripple effects:
- Temporarily closed US factories left a backlog of unclaimed cargo at domestic ports, causing bottlenecks.
- Exports from Asia swelled during lockdown as retailers like Walmart and Home Depot shipped 300% their normal volume.
- China’s now facing a massive container shortage, slowing exports and boosting demand for returning containers.
That’s a huge deal, considering that ~39% of all US imports come from China.
The cost of shipping a container is up ~200% over last year
Meanwhile, orders for new containers sank during the pandemic, and data from Hillebrand shows that, globally, we’re scrapping more containers than we’re producing, leading to further shortages and price hikes.
All of this was before a ship stuck in the Suez Canal blocked ~12% of the world’s seaborne trade.
Forbes reports that the bulk of this economic burden will fall on consumers, with prices on food and other staples rising.