The container shortage crisis during the pandemic and its impact on global economy

Last Modified: Wed Mar 10 2021 08:25:46 GMT+0530 (India Standard Time)
  • 17 million
    An estimated number of shipping containers (20 foot and 40-foot containers are the standard industry norms ) are circulating globally with more than 5300 vessels handling exclusively container cargo.
  • 85%
    + of global trade happens in containers. Containers thus are necessary for trade. And it is essential that containers move from one port to another; this is determined, like all things, by demand which again gets triggered by requirement-or in other words by the quantum of imports and exports. Thus, a balance, where import containers are destuffed and available for exports is necessary.
  • 2H2020
    By mid-2020, the pandemic had forced the shutting down of manufacture, loss of jobs and economies stuttering, leading to a steep reduction in trade-both imports and exports. The fall in imports after the pandemic led to a huge imbalance in the demand and supply of containers, hitting the availability of containers for exports. In effect, containers remained stationary wherever they were-circulation of containers not happening because of the fall in trade. This has impacted exports and worse, sharply increased costs as compared to the pre-COVID rates.
  • 90%
    + of India’s trade by volume and 75% by value of India’s trade moves by sea; a large percentage by containers. India depends on import containers are in turn used for exports. Containerised imports have seen a sharp decline since Jul-Aug 2020 as scheduled vessels were cancelled because of the shortage of container freight. According to the industry, after the lockdown was lifted, exporters rushed to meet export obligations but a shortage of containers has impacted exports of basmati, non-basmati, hand tools, sports goods, leather goods and textiles. It has impacted exports of sugar—total shipments of sugar in January 2021 being 3,29,185 MT as against 8,02,408 MT in the same month last year.
  • 66%
    Increase in cost of imports faced by Kenya due to a shortage of empty shipping containers in China, the country's major source market for goods, hitting businesses and threatening to dent customers' pockets. The cost of shipping a 40 foot container from China has gone up to Sh550,000 from Sh330,000 in December, according to a traders lobby.
  • 500%
    Jump in shipping costs seen in Cambodia from 2019 levels. The Cambodia Rice Federation (CRF) also reported major hindrances to rice exports for the first two months of this year stemming from the container shortages.