Importers or exporters in the United States have gotten to a difficult place in the current market where orders are surging as an economic recovery increases demand domestically and abroad heading into the holiday season, but a global equipment shortage has taken hold. Last week in our newsletter, the big surge in imports was noted, with orders 25% above the same time as in 2019. But in Asia, where a large volume of the US-bound cargo originates, there are massive shortages of containers, trucks, chassis, and space. Some carriers are finding themselves having to decline more cargo than they can accept, with demand outstripping supplies by huge margins.
A big source of this problem is simple enough: there are just not enough containers. Containers have always been in high demand, but with a swing from some of the lowest months of shipping to the current ongoing global surge, it has been an impossible task for carriers to get containers to the high-volume ports where they’re needed. This global dearth of steel containers has, at times, led to a paradox where ships have to move with some empty spots despite demand being far beyond maximum levels. The logistics of getting the proper equipment to where it can be best utilized remains an ongoing struggle.
A crucial part fueling this crunch has been the actual drivers themselves. There is a growing chorus from many carrier companies that they simply cannot find enough truckers globally to actually move the products and equipment to the port. There are so many moving parts to get equipment where it needs to be, loaded, and then on to the vessels themselves that it has been a challenge to find enough qualified people to drive the vehicles. One particular area that has suffered from this has been the already-hard-hit American agricultural exporters. In a good year, ag exporters can struggle to find good equipment, as the distance from ports, the margins of the cargo, and the difficulties in transporting it often make it less attractive cargo for shippers compared to other goods. This year, farmers and ag companies have noted huge lags in their ability to procure and schedule deliveries, often only able to secure space and equipment for portions of their cargo.
This has had the effect of maintaining rates at some of the highest levels they’ve maintained for years. Peak season rates, as well as growing surcharges for premium service and guaranteed space, has led the multinational ocean carriers to have some of their strongest profit results in years. The immediate outlook for the next few months points to global congestion for the next several months, extending past the first of the year and far beyond typical late-year crunches.
JMR’s global network positions us uniquely to work only with the best experts in their local markets globally. If you are an importer or exporter needing to move product quickly, please contact our SVP of Sales Andrew Galloway at (212) 220-7412, (973) 726-5340, or via email at email@example.com.