Global Shipping Facing a Surplus of Containers

While there was a shortage of containers at the height of the COVID-19 pandemic, the global economy is now facing the opposite problem: too many containers.

On top of falling freight rates, data shows container depots — used to house containers after they are unloaded — are now filling up or full.
It points to more signs of falling global demand and an impending economic slowdown.

Traders and shippers say the decline in global consumer demand is not a sign the global economy is normalizing after a frantic post-lock down consumption rush, but a downward shift in consumption appetites.

What has happened now is that the cargo is ‘on time’ again and hence you’ll see a slowdown in new ordering…

“There is just not enough depot space to accommodate all the containers,” online container logistics platform Container xChange chief executive Christian Roeloffs said in an industry update recently. “With the further release of container inventory into the market, for example from the disposal of leasing fleets, there will be added pressure on depots in the coming months.”

Italian container depot owner Sogese chief executive Andrea Monti told Container xChange that the peak season of goods shipments — as Christmas looms — “technically did not happen this year.” Retailers are cautious about the high level of inventory they have on hand, Monti said.

To combat full and overflowing depots, ports such as the Port of Houston have started levying fees for empty containers sitting in terminals for more than seven days, according to global claims management provider Sedgwick’s national marine manager, Darin Miller.

“Often left sitting for weeks on end, the sheer number of containers on ships or at ports, leaves us with insufficient depot space which only exacerbates our ongoing supply chain crisis as it impacts container repositioning and movement,” Miller said.