A Shipping Container Shortage?

John Konrad
Total Views: 164
April 10, 2008

Shipping Containers

Only in the eclectic world of the maritime blogosphere could the best provider of interesting content find its roots in a parking problem. Such is the case with our friends at Telstar Logistics who bring us a surprising update on the nation’s trade imbalance… there is a shortage of shipping containers. The Wall Street Journal writes:

Finding enough of the big metal boxes used to be a cinch, because the nation’s massive hunger for imports meant they were constantly arriving and stacking up from Long Beach, Calif., to Long Island, N.Y. Shipping companies typically scoured the country for anyone willing to fill outgoing boxes. But with the slump in the value of the dollar making U.S. goods more attractive to foreign buyers and many overseas economies continuing to hum, the tide has shifted in recent months. Trade figures being released Thursday are expected by many economists to show further growth in exports.

Shipping containers — and the way they’re handled — reflect how the U.S. interacts with the global economy, which is one reason the problem has emerged now. For years, the U.S. crafted a trading system that was designed to pull in masses of imported consumers goods such as sneakers and VCRs as efficiently as possible from countries like China. Far less was expected to flow the other way.

What has happened now has thrown a wrench into the works. Cutbacks by U.S. consumers have slowed the growth of imports, while the weak dollar is making the U.S. into an export machine. Meanwhile, the places where most of these exports are originating are far from where boxes are being unpacked and soaring energy costs make it too costly to just load them on trucks and move them around.

“There are some places, particularly in the Midwest, where there’s a complete lack of containers,” says Philip Damas, the head of container research at Drewry Shipping Consultants in London. […]

Analysts say shipping costs are rising, too. Mr. Damas, the London-based consultant, says the cost of shipping a 40-foot container from the West Coast to China is now $1,500, up at least 20% in the past year. In many cases, boxes that previously would be sent to inland locations never leave the coast.

The problem surfaced about six months ago and can be traced to a confluence of factors, beyond the slump in the dollar. For one, the global commodity boom has increased the cost of shipping items by bulk, which in turn has pushed more goods into containers.

It doesn’t help that containers don’t tend to flow to places that make most U.S. exports. More imports to the U.S. are consumer goods, which are often unloaded near retailers and warehouses in large cities, including Los Angeles, Chicago, and New York. In the case of Chicago, many containers come off ships from Asia and onto trains destined for “inland” destinations. But U.S. commodity exports, such as cotton and corn, are grown far from those hubs. Continue Reading…

For those interested in photography the above photo was taken by Telstar and posted to Flickr’s Big Metal Box group a must see collection of images related to…. you guessed it; shipping containers. Their must see slideshow can be found HERE.

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