Increase in container shipping costs and delays since 2020

Vancouver’s leader in trucking and warehousing explores the world of container shipping and why freight costs and delays are still happening in 2021. 

Overseas shipping containers are essential and affect all our daily lives in some way as a majority of goods are transported across our world globally by ship. When the supply and demand of containers are locked in an imbalance, shipping delays and increases in costs are inevitable. Those in the logistics sector or businesses that rely heavily on the import and export of goods would have probably experienced a fair amount of fluctuation in shipping costs and schedules by now. Even retail consumers have seen the price of goods increase or are simply greeted with empty store shelves. Let’s take a look at how we arrived at this situation. 

Where are containers made and how does one get their hand on one?

China produces roughly 96% of the world’s supply of containers and manufacturers have worked hard to increase their supply as the demand for containers this past year has skyrocketed. However, keeping up with demand has proved to be a challenge as steel, floor timber, and qualified welders are also in short supply. 

Containers typically begin their life journey fresh out of the manufacturing facility in China. Goods are then packed into these steel containers to be shipped to their destination (North America, Europe, etc.). As the goods arrive and then offloaded, the same containers are then reloaded with new goods and shipped to the next destination and typically back to China for the next round. This cycle continues on and on.  

Businesses that need to transport goods typically rent intermodal containers that get transported via sea, rail, or LTL/FTL trucking services. However, securing a box or even buying one secondhand isn’t that easy nowadays. 

Has the cost of shipping really increased by a lot?

The pre-pandemic days for shipping companies weren’t exactly rosy. There was an excess supply of ships and not enough containers to move around. However, the pandemic has definitely changed things up and saying profits and shipping costs are making a rebound is an understatement. Freight rates have tripped over the past year and experts predict that this rise will be here for a while. 

What drove shipping costs to rise and delays to be a norm?

The rise in the cost of freight and shipping delays was kick-started at the beginning of the pandemic when the global economy shut down. Manufacturing across the world, especially China, and global transport came to a standstill as countries raced to learn more about the Coronavirus. Once the economy began to open up, there was a build-up of goods ready for export in China. However, there were not enough containers readily available in China to ship the bottleneck of goods as a lot of the empty steel boxes were still sitting at ports around the world. 

One would think that this rise in shipping costs and delays would ease as the flow of goods resumed and the backlog of exports in China was taken care of. But, this was not the case. It turns out there is an actual increase in demand for physical products as consumers in wealthy countries shift their spending. As customers divert their dollars away from experiences, travel, movies, dinner, etc., they, in turn, spend more money on new products.   

Global events also play a role in impacting shipping costs and schedules. The episode in the Suez Canal definitely didn’t help ease prices and in fact, contributed to more pressure on the demand for containers.

Port Metro Vancouver is a major player in the Pacific Gateway and is responsible for the flow of billions of dollars worth of goods per year. As a leading provider of transportation and warehousing in BC with authorized access to all major ports and rails, we are well-versed in the latest changes and developments related to shipping, trucking, intermodal transportation, and importing/exporting. 
Our experienced team, a full fleet of 250+ trailers, an extensive range of trucks, LTL/FTL services, bonded sufferance warehouse are here to help your business thrive. Whether you are a veteran in importing or exporting and looking for better service or just starting your business, our friendly team is here to answer any questions that you may have before, during, and after shipping. Contact us today at (604)-276-9044 or info@sandhartrucking.com!