Shipping container shortage severely impacts global trade by decreasing shipping expenses and increasing delays. This container crisis causes inflationary pressures and impacts businesses and customers worldwide. The limited availability of the increasing shipping rates has been a complementary pressure on the shipping industry. This logistics challenge has become a significant concern for exporters around the globe, and it is disrupting global supply chains. 

This blog will discuss the reason behind the shipping container shortage and its impact on global trade. We will comprehensively explore the potential causes and effects to understand the complex logistics and shipping environment. 

What is a shipping container shortage? 

As the name suggests, the shipping container shortage is a significant worldwide issue affecting the supply chain. This logistics phenomenon occurs when insufficient containers meet the consumer’s demand. It can cause delays, high prices, and other global supply chain issues. This has already happened in the market during the COVID-19 pandemic when there was a drastic drop in global trade. At that time, the prices of shipping containers rose in the significant recovery areas. This mismatch creates hustle and bustle in the state, leading to supply chain disruptions. 

Significant impacts of shipping container shortage on global trade

Shipping containers are indispensable components of global trade. The shipping container shortage severely impacts global trade because of its portability and agility. The following are the significant shipping effects of container shortage on international trade: 

1. Increasing shipping rates: The significant impact of the shortage of shipping container boxes is the increasing shipping rates. The increased freight, shipping, and logistics prices due to the lack of containers increased the overall supply chain rates. All this collectively adds to the product’s ultimate prices that reach the consumers. 
2. Economic impacts: The container shortage adversely affects the economic infrastructure. Developing countries depend heavily on exports and struggle to get their goods into the market. As a result, import-dependent nations face a scarcity of essential goods. This will create inflationary pressures on the economies. 
3. Supply chain disruptions: The storage container shortage exposes the current vulnerability of a country’s state to the market. This disrupts production schedules and causes inventory shortages. These shortages notably affect various industries, such as automotive, electronics, and consumer goods. 
4. Delivery delays: The limited availability of containers delays the deliveries. The scarcity of shipping containers implies limited space, and limited space implies more transits and distribution of goods among those transits. The just-in-time industries are majorly affected by this shortage of containers globally, economically, and socially.

Causes of shipping container shortage

The shipping container shortage is a major setback for global trade and supply chain management. Many incidents lead to the scarcity of containers. The following are the causes of the shipping container shortage: 

1. Inflated shipping prices: When shipping expenses increase, the shipping container rate increases, creating a scarcity of containers for those with low budgets. A state’s economic factors can also inflate freight rates.
2. Port congestion: One major cause of the worldwide container shortage is port congestion. Congested container ports lead to delayed shipments, halted transits, unsynchronized containers, and less labor, all collectively contributing to the scarcity of containers at the concerned locations. 
3. Labor shortages: When there is a labor shortage due to unforeseen events, the container’s availability at the expected locations decreases. For instance, during the COVID-19 pandemic, when the trade had just started in the recovery phase, there was a labor shortage for unloading, loading, and other logistics operations that delayed the container services at other locations. 
4. Fluctuating trade patterns: The fluctuating trade patterns are one of the major causes of the container shortage. Shifts in consumer purchasing behavior and certain unpredictable events like COVID-19 can cause major depletions in global trade. The fluctuation makes it harder for traders to manage their supply chain and logistics operations. 
5. Fewer operational vessels: When fewer operational containers are in the market for refurbishment or maintenance, the industry faces a container shortage, decreasing the number of container ships available. 
6. Geopolitical events: Any trade war or disturbing geopolitical events within the countryside or outside the borders can also cause ocean container shortages. Recent examples of geopolitical events are the Russia- Ukraine and the India- China wars, which have changed trading patterns, halted some shipments at undesired locations, and led to a shortage of shipping containers. 

Management strategies for shipping container shortage

To deal with the container shortage as a global problem for shipping and logistics, you must adopt a certain management strategy. The following are the strategies for managing the shipping container shortage: 

Access premium products: Some carriers offer premium container logistics and supply chain optimization services. With access to premium services and carriers, you can easily manage the container shortage problem with their risk mitigation strategies. 

Gain knowledge: You need adequate knowledge about forecasts to design unpredictable solutions for global shipping storage. For this, you need to look for reliable information sources, analyze upcoming events, discover alternative routes, and consider container types. 

Plan bookings in advance: With the help of data analytics and forecasting tools, you can get an idea bout the upcoming container shortage in the market. So, you can book the type you want in advance and eliminate the shortage problem. 

Enhance supply chain agility: To cope with fluctuating conditions, improve your supply chain agility. Develop strategies and processes that facilitate quick adjustments to changing market conditions. 

Technological investment: Invest in technological tools and implications to implement tracing and management systems to improve supply chain visibility. The technological tools and machinery will allow better anticipation of disruption. 

Long-term considerations of shipping container shortage

The shipping container shortage exposes various vulnerabilities and prompts businesses to reevaluate their sourcing, logistics, and production strategies. Here is a deeper analysis of long-term considerations of shortages: 

1. Sustainability and efficiency: It has underscored the environmental effects of logistics and transportation. Now, companies are identifying the importance of adopting sustainable practices to decrease their carbon footprint. Also, businesses are adopting the models to promote recycling and reduce and reuse waste in supply chains. 
2. Diversification of suppliers: Businesses diversify their supplier relationships to find alternate providers in scarce situations. Companies can mitigate the risks of supply chain disruptions by sourcing products and materials from multiple suppliers. Therefore, it decreases container transportation expenses and lead times. 
3. Supply chain resilience: Several events, such as health crises, natural disasters, and geopolitical events, have cascading impacts on production and distribution. Companies are developing strategies to decrease single-source dependency. Therefore, supply chain resilience is the primary consideration for shipping shortages. 

The shipping container shortage has significantly shifted how companies approach their supply chain operations. Embracing sustainability and efficiency with the help of digitalization and technology helps businesses achieve greater heights. Businesses can easily prepare for potential disruptions by focusing on supply chain resilience, production, and diversification. You must understand the causes and effects of the shipping container shortage and implement risk mitigation strategies to eliminate global supply chain disruptions. 

LOTUS Containers offers shipping services from container types and standard to specialized boxes, such as open-top, flat-rack, dry-van, and reefer containers. These boxes adhere to all customs duties and compliances, simplifying the supply chain.