Our complex, world-spanning system of global trade relies enormously on shipping containers, metal boxes that range from 20 to 40 feet long that transport nearly every product imaginable. But just like so many of the items that are usually packed into these receptacles, the pandemic has caused a shortage of shipping containers that is reverberating across global supply chains. Despite an upsurge in production of containers and rebounding consumer demand, many manufacturers are unable to prepare products for transportation due to a lack of receptacles.
The root of the problem lies in the shipping disruptions that have burdened world trade for more than a year. Along with the blockage of the Suez Canal in March, other events such as the shutdown of a key port in China as well as traffic jams at American ports have left more than 350,000 container ships idling. As these vessels wait for weeks at a time to unload their cargo, the containers packed on the ships also stay idle and out of the hands of transporters who need them on the shore. According to the Agriculture Transportation Coalition, its members have lost 22 percent of sales because they cannot access their overseas cargo.
For those who finally manage to get their products on land, matters become complicated further due to railway congestion and shortages of warehouse workers and truck drivers. This contributes to the lack of shipping containers as overburdened railway stations struggle to quickly unload and turn over receptacles. Unfortunately, neither regulators nor transportation companies can do much to relieve the container shortage as long as so many other supply chain problems also persist.
Questions:
- What are the causes of the current shortage of shipping containers?
- Do you think companies should reconsider their dependence on foreign manufacturing in light of recent supply chain problems? Why or why not?
Source: Paul Berger, “Where Did All the Shipping Containers Go?” The Wall Street Journal, August 4, 2021.