The world does not have enough containers in the right places to handle cargo demand, according to trade publication Freight Waves.
Three Chinese companies—CIMC, DFIC and CXIC—produce around 80% of the world’s shipping containers. Production is up sharply, with estimates for 6%-8% growth in container capacity this year. Still, boxes aren’t being built fast enough to ease the capacity crunch. The shortfall is already contributing to inflation, according to The New York Times, as retailers pass along higher transport costs to consumers.
It’s been months since the shortage first emerged, but it shows no sign of easing.
Equipment leasing companies, which order containers from the Chinese manufacturers and lease the boxes to shipping lines, are predicting steady profits going forward into 2022, according to two of the top public leasing companies—Triton International and CAI International—which reported their first quarter 2021 results last Thursday.
Generally speaking, the more profitable the market conditions for container lessors, the tighter box capacity is and the more cargo shippers must pay liners for transport, which signals bad news for U.S. importers and exporters.
Relief from container scarcity is not just about production, though. Many containers have been held up by port congestion as well as the Ever Given accident in the Suez Canal. When such logjams clear, more containers will become available. Read the full story.