Shipping Container Shortage Worldwide & Resulting Cost Increases
In late 2019, a brand new virus emerged, but no one could predict the series of events that followed the novel bug. Almost 2 years later, there is not a single industry that hasn’t been impacted by the COVID 19 pandemic. With business closures lasting months, worker shortages worldwide, all in addition to a serious and deadly illness, all industry’s outputs have not easily been able to meet incoming demands. These unprecedented circumstances have had a butterfly effect on global supply chains.
What’s going on with the Container shortage?
Around the world, the price of shipping containers has skyrocketed while availability has plummeted. Close to 90% of the world’s shipping is conducted through maritime freight shipping. On each cargo ship, there are close to 5000 shipping containers. Usually, these containers are sent back and forth without a problem.
Throughout the pandemic, consumers have been doing a considerable amount of shopping, and healthcare facilities require a much larger supply of personal protective equipment. Both of these place extraordinary pressure on China’s freight shipping and supply industries.
With higher shipping demands, chronic shipping backlogs have thousands of shipping containers backlogged in various global shipping ports and at sea. Typical travel time for a container has nearly doubled in length from around 50-60 days port to port to upwards of 100 now. Not only is there a serious number of shipping containers tied up, but producing enough new containers to offset the imbalance poses a secondary challenge.
Most shipping container manufacturers had to cancel a ton of new production to prevent the spread of COVID-19. The effects of those cancellations have sent waves through the maritime shipping industry. Now, to meet global demands, old containers are being left in circulation longer.
Thanks to the shortage of available containers, shipping container prices are going up dramatically. China has started to pay a premium for shipping containers to meet the extreme shipping and supply demands. Rather than waiting for shipping containers to be sent back with western manufactured goods, they buy back the empty containers and start the process over again.
How the shipping container shortage impacts Giant Containers
Giant Containers pushes creativity limits by transforming old shipping containers into brand new custom luxury spaces for businesses, pop-up shops for store owners, unique houses for homeowners, and so much more. Each of these builds is sustainable, environmentally conscious, typically cost-effective, and most of all, unique. Throughout the shipping container shortage, getting our hands on the number of shipping containers we would like to have, has been a steep and more expensive task.
Giant Containers purchases the shipping containers we use from suppliers looking to rotate containers out of cargo use. Unfortunately for us, fewer containers are being introduced, and older ones remain in circulation longer to meet current shipping demands, complicating this part of the creative process. While we can still manage to get our hands on containers, it now comes at a premium. The shipping containers that are up for sale sell for close to 5 times more than before the pandemic.
What our customers can expect moving forward
Good news for our customers! The price of shipping containers will slowly level off as the routine pre-pandemic activity resumes. We anticipate shipping demands will rebalance, and container manufacturers will be able to introduce new containers into circulation.
Until then, we are committed to delivering the same quality of work, design, and craftsmanship to all our customers. Modular and prefab structures remain a unique and sustainable building practice. And while we can’t provide the lower costs you may have been expecting, the design, along with the performance of our structures, is something we are not willing to sacrifice at any point.
Interested in learning more about our shipping container builds and what we can craft for you? Please send us a message, and a Giant Container representative will get back to you with all the information you need