BEIJING/SINGAPORE (Reuters) – China’s world-beating economic rebound from the coronavirus pandemic is being blunted by a global shortage of shipping containers, sending cargo costs to record highs and hampering manufacturers in filling fast-recovering global goods orders.
Exports from China surged 21% in November from a year ago as the country’s mammoth industrial engine cranked out mountains of appliances, toys, clothes, personal protective equipment and other items currently in high demand around the world.
But due to China’s lopsided trade balance – exporting three containers for every one imported recently – and delays in containers returning to China due to the pandemic overseas, a severe shortage is now starting to pinch export flows. Roughly 60% of global goods move by container, and according to United Nations trade data there are close to 180 million containers worldwide.
“We have so many orders but just cannot ship things,” said Charles Xu, a mirror salesman in the export manufacturing hub of Yiwu in Zhejiang province who supplies U.S. retailers such as Walmart and Home Depot.
“Boxes are piling up at our factory and we don’t have much space left. It’s just hard to book containers, and everyone is bidding for them with high prices,” he said.
Average container turnaround times have ballooned to 100 days from 60 days previously because of COVID-19-related handling capacity cuts in Europe and the United States, according to the China Container Industry Association (CCIA), and that has exacerbated the shortage. U.S. importers already reported problems with shipment delays in November.
The grounding of much of the global international passenger air fleet – which often also carries cargo – has also boosted demand for maritime freight.
With little change in prospect before coronavirus vaccines are rolled out globally, changing the dynamics of trade and freight, shipping rates have spiked as a result. The cost of chartering a 40-foot container from China to the U.S. East Coast scaled a record $4,928 this week, up 85% since June 1, according to Freightos data in Refinitiv Eikon.
Image | REUTERS