There is today a notable lack of empty containers in the world. The main reason behind this is, of course, the COVID-19 pandemic. It has become a serious problem in the logistic industry. Many countries around the globe entered lockdowns impacting the whole logistics supply chain and world economy. Labour manpower in ports, trucking companies, customs, has been reduced, factories have been closed, shipping lines have reduced the number of sailings and the capacity of vessels downsized in many trades has been reduced when there is less cargo to be shipped. Smaller vessels mean less capacity to evacuate empty containers from surplus areas and bring them to shortage areas exporting more than they import. Import containers stay longer with consignees as well because they also have reduced their activities, opening hours and workforce, so containers are returning back empty to the port much later than before.

Where is the demand?

China was the first country impacted by COVID-19 but also the first one to restart the business, this led to an increased demand for empty containers and China is a country who is traditionally imbalanced in terms of containers as the export volumes are much higher than the import volumes so shipping lines need to constantly bring empty containers from surplus areas in the world to be able to attend the export bookings. The golden week in October for China’s national holiday celebrations combined with the Christmas period combined with a boom in export after the reopening of activities especially affected the world logistic supply chain in Q4 2020. 

Freight-rates are also increasing

Limited space and container shortage had an impact on freight rates which have drastically increased reaching levels never seen before. Shipping lines are charging peak-season surcharges, imbalance surcharges on top of rates as well in order not to lose the momentum after years of very low freight rates.

With the current market situation, shipping companies are being selective when it comes to the trades for which priority is given in terms of empty containers availability.

What about Africa?

Africa is, in general, a surplus area, as there are much more imports than exports and in some cases out of 4 containers imported full, only 1 is exported full, the other 3 are shipped out empty to shortage areas like Asia. The import processes can be quite slow in many countries in normal times resulting in container staying full in the port for a long time while waiting for customs clearance and this creates regularly congestion not only in the yard, gates, stack but in the whole port area.

With the pandemic, the situation has of course worsen. Vessels calling the majority of African ports have currently important limitations in terms of size, due to low draft in the access channel or at berth in the port and small quay length. This lead shipping lines to deploy smaller vessels than on other trades where the ports are able to operate bigger vessels. But there are investments planned and ambitious projects going on in many ports so the situation should change positively and improve in the next 2 years.

But let’s be positive, the situation of container shortage should slowly start to get better in the coming months as empty containers that were stuck in surplus areas will slowly start to arrive in shortage areas but one thing is sure, the freight rates will remain high for a while…