Their lack was one of the causes of the world trade crisis of the last three years; today the opposite problem exists
For months, unused containers, i.e. huge metal boxes with which everything is shipped, mainly by ship, have been piling up in Chinese ports. Port managers no longer know where to house them. It’s a paradoxical situation, because the lack of containers was one of the most prominent problems of the world trade crisis, one of the most serious economic consequences of the pandemic. Among other things, the crisis had led to a series of enormous delays and blockages in deliveries, and caused many goods and raw materials to become unavailable and their prices to rise significantly. The problem of container shortages was particularly felt in China’s ports, from which shipping had become very expensive.
A lot has changed since then: the pandemic is over, international trade has greatly reduced its pace, shipping costs have returned to normal and the world trade crisis has more or less resolved itself: one of the effects of all this has been the biggest one in the pandemic produced containers are no longer needed.
More than 80 percent of the volume of goods transported worldwide is transported on cargo ships, i.e. container ships. This means that almost all goods we buy (or the materials from which they are made) have been transported in a container on a cargo ship at some point in the journey. In fact, for transporting large quantities of non-perishable goods over long distances, sea transport is the most convenient (while faster air transport is often preferable for perishable goods). In the ports where they arrive, the containers are loaded onto trucks or trains to complete their journey: a logistical method called intermodal transport, based on the standardization of containers at international level and easy transport by one vehicle on the other hand, to make the process as quick as possible.
Intermodal transport is a relatively recent innovation: it has existed for less than seventy years and was one of the factors that made possible the phenomenon of globalization, that is, the integration of different regional economies into a single global economy.
The blockade of this system had consequences along the entire production chain and already began with the first lockdowns: In view of the global collapse in the production and export of goods during the first wave of the pandemic, transport companies had canceled hundreds of journeys. This had disrupted the normal flow of empty containers that had not returned to their most urgent destination.
In particular, those who had transported goods from China to the United States stayed in US warehouses, which were often far from ports due to space constraints. The United States imports far more goods from China than it exports, and so there is a flow of full containers that tends to go from China to the United States, and a flow of empty containers that tends to go in the opposite direction. When Chinese production resumed and demand for goods shipments began to recover – and quickly too – several Chinese ports ran out of containers.
In this emergency situation, ports and shipping companies had made enormous investments and hoarded containers to increase their transport capacity. In 2021, global production had reached 7 million standard-size containers, more than double the production in 2020. Container production had risen rapidly in response to a pandemic-driven surge in demand for physical goods, when much of the consumption was product-centric , and not for all services closed due to social restrictions such as those offered by restaurants and hotels.
Since the easing of restrictions, some consumption is flowing back into the gradually reopening services, reducing demand for physical goods. The shipping industry is therefore faced with the opposite problem: an oversupply of containers causing problems in the ports of China, a country that produces almost all of the world’s containers.
According to the Financial Times, the production of the most common and standard containers (12 meters long) has fallen by 71 percent: from over a million units in the first quarter of 2022 to just over 300,000 in the first three months of this year. The drop in demand has also hit container producers hard. Profits at China International Marine Containers, one of the country’s biggest producers, fell 91 percent year-on-year in the first three months of this year.
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