Equipment shortages hit US and European shippers

3/22/2020

A large number of blanked sailings has left containers stacked up in China, where businesses want to be ready to catch the rebound. Now shippers are struggling to find empties for backhaul exports

The drop in coronavirus cases in China is coinciding with factories resuming production, but the movement of empty equipment to China and the high number of blanked sailings has taken a toll on shippers with regard to backhaul trades.

“For the first time, there is almost no container equipment in Europe and North America owing to the carriers’ blank sailings,” said container positioning service Container xChange. “They want to be ready in China, waiting for the economy to go up again.”

With the coronavirus outbreak now taking hold in Europe and the US, equipment turnaround times were putting even more stress on container lines, it added.

“As most countries in Europe have shut down operations, container inspections, handling or stuffing — every part of the transport chain that requires human interaction — are heavily delayed,” Container xChange said.

In Shanghai, Container xChange’s Container Availability Index shows a surplus of empty 40 ft dry containers at a time of year when there is usually a deficit.

Meanwhile, in Los Angeles, which usually has a surfeit of empties, there are acute shortages. The port’s availability index value is now at an all-time low of 0.08 for 40 ft boxes in March. Any figure over 0.5 indicates a surplus, while any figure below shows a shortage of available containers.

“In response to the carriers’ blank sailings, we can see some companies switching to rail freight, but the equipment situation is not yet getting better for most shipping companies,” Containers xChange said.

“Although it seems like China is successfully fighting coronavirus, with more people being infected in Europe we estimate that the situation will not get better during the next weeks. Even if the Chinese economy gets back to usual productivity, we’re a few weeks behind regarding the pandemic development.”