China can hardly find a container , at the same time foreign empty containers are blocking the port! When will the lack of container can be resolved?

For a foreign trader, the most worrying thing in the work is not no orders, but goods can not be delivered

Since the second half of 2020, many foreign trader have faced the problem of Ship reduction. Some of them forced themselves to accept high freight charges, but they eventually fell on the shortage of containers.

The current "envy chain" in the foreign trade circle is like this: foreign trader envy freight forwarders, freight forwarders envy shipping companies, and shipping companies say: freight forwarders and shipping companies make less money than renting containers.

Osmo Lahtinen, the founder of the Finnish container leasing company O.V. Lahtinen, lamented: "I have been in the industry for so many years, and I have never seen such a crazy thing. Nowadays, it is hard to find a container in China, but it is piled up in Europe and America."

It is not only the shipping that is affected, but even the China-Europe freight trains can no longer get the container. A China-Europe freight trains platform company said: “Many customers want to book a space. We don’t have container to put them in, so they can’t get on the cabin. The lack of containers has affected some of the China-Europe freight trains plans. For example, a city in Central China to Germany , the cost of renting a container has soared from $500 to $1,500."

Statistics from the China Container Association show that China’s export containers mainly meet supply in two ways: empty containers after unloading at ports and new containers made by Chinese container manufacturers.

Look at the first way: old empty container.

At present, our Country can only return one for every 3.5 containers exported. A large number of empty containers are backlogged in the United States, Europe, Australia and other places, and the five major ports are experiencing "death blockage".

The ports of Los Angeles and Long Beach in the United States were "flooded" as early as November last year. In November, 26 additional loading vessels docked and 31 such loading vessels docked in December. A port manager said that more cargo ships are expected to call at the terminal in January. U.S. importers are buying goods frantically, causing a backlog of tens of thousands of containers.

According to a report by the Los Angeles Times on January 20, nearly 700 dockers in the two ports of Los Angeles and Long Beach were infected with the COVID-19. Hundreds of people are still in quarantine. The logistics economy of the two ports is billions of dollars. It is likely that there will be a severe slowdown.

Not to mention the United Kingdom, the epidemic is superimposed on Brexit, and the port of Felixstowe, the largest container port in the United Kingdom, fell into serious congestion as early as November last year. It usually handles 40% of all container traffic in the UK, and now the average ship stays in the port for more than 32 hours. This series of conditions force shippers to transfer their cargo to other ports. A large number of containers piled up, and the port once refused to arrive at the port with empty containers. Later, even in villages near the port, a large number of "overflowing" empty containers were found.

In Nigeria’s busiest ports, Lagostinkan Port and Apapa Port, many ships cannot enter and unload, and can only stay at sea. The congestion is very serious. It is said that the freight for a container to be towed 20 kilometers inland more than four thousand dollars, which is equivalent to the long-distance ocean freight, the congestion and high freight even caused importers to abandon the goods, and four thousand overdue containers will be auctioned!

The main problem with Australian port congestion is the strike of dock workers. At the beginning of October last year, in order to negotiate a new salary agreement, the Australian Maritime Union launched a strike action against Patrick Terminals. A few months have passed, and the supply chain delay caused by the strike continues. The shipping company said that due to previous strikes, the ship’s schedule was disrupted, resulting in a "8 to 10 week" backlog of cargo.

The second largest shipping port in Southeast Asia, Port Klang in Malaysia, also fell into serious congestion during the New Year's Day. Many wholesalers and retailers said that the container congestion in West Port of Port Klang caused delivery delays for more than one month, which greatly increased logistics costs. What’s more terrible is that, in order to prevent and control the epidemic, Malaysia has restarted the restriction order from January 13 to January 26. The areas where the movement restriction order has been restarted include Kuala Lumpur, Putrajaya, Labuan Federal Territory, 5 states of Selangor, Johor, Penang, Sabah, and Malacca.

The second way: new container.

Recently American freight forwarder Flexport stated that only 500,000 new 20-feet containers can be produced to meet market demand, and it will take 3-6 months for manufacturers to complete orders. You know, 500,000 new containers are enough to fill 25 of the world’s largest container ships...

At present, more than 90% of global containers are supplied by Chinese companies. According to the research report of Dongxing Securities, on the container production side, CIMC (CIMC, market share of 44%), Shanghai Huanyu (DFIC, market share of about 24%), and Xinhuachang (CXIC, market share of About 13%), Singamas (about 3% market share) accounted for most of the market share.

In November last year, the China Container Industry Association issued an "Action Initiative for Enterprises in the Container Industry Chain to Work Together to Stabilize Foreign Trade and Promote Growth," which stated that "After the underestimation of orders in the first half of the year, container orders have been increasing since July. Our Country's containers Manufacturing companies have increased their production significantly since August. In order to meet the rapid changes in the market and the demand for containers, container manufacturing companies have been working hard to ensure supply. According to the monitoring data of our association, the output of standard dry containers increased by 100% in August compared with July, and continued to increase to nearly 300,000 TEU in September. The monthly output of containers hit the highest level in the past five years, and continued to maintain a high level output from October to November. The container manufacturing factories have already put into full-load production, adopting various methods to promote production. Production hours have also increased from 8 hours per shift to 11 hours. "

However, the production of new containers still cannot meet market demand at present .

However, the continued hot container production orders have caused the price of raw materials in the container supply chain to rise, including raw materials required for container production such as steel, wooden floors, and paint, which also pushed up the price of new containers. A salesperson from a manufacturer said, "The current selling price of a 20-feet container (standard container) is $2,600, a 40-feet container (high container) is $4,420, and a 40-feet container (general purpose container) is about $4210."

In addition, the service life of containers is as long as 10-15 years. Now that there is a large amount of production, how to digest the excess capacity? The shipping industry predicts that the shortage of containers will continue until the first quarter of 2021. Therefore, some large domestic container companies dare not accept orders for the second quarter of next year.

Is there any new policy guidance?

Gao Feng, spokesman of the Ministry of Commerce, stated at a press conference on December 3, 2020 that he would work with relevant departments to promote increased capacity allocation, support accelerated container return transportation, improve operational efficiency, and support container manufacturers to expand production capacity. At the same time, we will increase market supervision, strive to stabilize market prices, and provide logistics support for the steady development of foreign trade.

The latest news is that the General Office of Ningbo Municipal Government issued on January 8 "Several Opinions on Doing a Good Job in the Problem of Current Cross-border Logistics Missing Spaces and Containers". In order to solve the "hard to find one container" problem in the current shipping market, we will start from ten aspects including increasing shipping capacity, ensuring the supply of empty containers, stabilizing freight and container prices, and accelerating container turnover. The "Opinions" put forward:

1.Increase the shipping capacity of routes.

2.Ensure the supply of empty containers.

3.Stabilize the freight and box prices.

4.Speed up container turnover.

5.Implement the port fee reduction policy.

6.Enhance market transparency.

7.Carry out special rectification actions.

8.Increase financial support.

9.Do a good job in stabilizing and retaining jobs.

According to reports, in order to effectively cope with the outstanding problems of current cross-border logistics, such as lack of space, lack of containers, and rising freight rates, the municipal government has established a special work class, which is composed of transportation, ports, commerce, market supervision, Ningbo Zhoushan port and other relevant units.

In the next step, the special working class will strengthen the guidance services for foreign trade import and export enterprises, encourage foreign trade enterprises to gradually ship goods according to the demand and plan, and avoid further pushing forward the tightness of capacity and high freight rates due to concentrated pre-shipment. At the same time, multiple departments will jointly crack down on illegal activities such as "hiding containers" and "selling containers", and deal with person who illegally resell containers according to regulations and laws.

According to estimates by freight forwarders, shipping will return to normal after August this year.

Vincent Clerc, chief commercial officer of Maersk, predicted in an interview on January 6 Maersk Line’s current cargo volume is huge and crazy, and there are not enough containers to meet the demand at present. Even if Europe is blocked again, Maersk will not see significant changes in demand, and the current high level of demand in the container ship market will continue for at least a few weeks. Although the freight rate is already at a high level but has not reached the highest level, it may reach its peak at some point in the first half of this year.