If you were not aware of the serious logistics situation China is going through, you cannot miss reading this article; here we will tell you 5 facts you need to know about the container shortage and the rate increases by shipping companies.
With the reactivation of production in May, following the Covid-19 pandemic, China is facing a real challenge to meet the demand for containers, a situation that affects not only industries, but also foreign trade companies, wholesalers and retailers.
As we well know, China was one of the first countries to resume its economic activities; when its factories resumed production, its exports increased faster than any other country. Added to this, every year large volumes of merchandise are sent to North America for the Christmas season, at a time of high demand in the month of September, approximately 900,000 20-foot containers per month.
So, with the sum of these events occurring together, containers arrive at port but cannot be unloaded quickly, and end up scattered inland, not only in the United States but in much of the world.
Why do they stay so long without resuming their route back to China?
Well, as we mentioned, not all countries recovered from the pandemic as quickly as China did; some are still experiencing problems such as:
- Lack of production and increased demand for Chinese products.
- Labour shortages.
- Lack of personnel assigned to foreign trade tasks.
- Lack of drivers.
- Lack of chassis to pick up containers.
These factors make the quick return of containers to China impossible; under normal conditions, the return used to take 1 to 2 days, now it takes them at least 7 to 10 days.
This translates to...
"Chinese products are there, ready to be shipped, but the containers needed to load them and take them to their destination are not."
What is happening to sea freight costs?
To top it off, it has caused an increase in rates that range as follows:
The world's main container leasing companies said that the container shortage will continue in the coming months; they estimate that the problem will be resolved from mid-February or March 2021, and it could be extended.
Now then... we are not going to leave you alone! To manage operations optimally, in this situation, we all have to do our part...
At MingTa Group, as your import team, we recommend booking with as much time as possible and keeping in mind that it is very likely that the shipping date will be delayed a few more days than expected; it is time to work as a team, with trust and patience.
If you want to know the steps to import, and how we can be a solution for you and your company, we invite you to read this article, click here
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