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July 7, 2021 at 1:49 PM

 

 

 

A global scarcity of transportation equipment is creating order delivery delays all around the world. At the origin port, vessels are stacked with no containers to carry goods. China is selling more goods to the West than it is importing. This means that containers are delivered from China to Europe and Africa and do not return to China or other European countries in the same region. As a result of this, there is insufficient logistics circulation. Since 2020, container prices have climbed by more than 100%. The cost of shipping a 40-foot container from Asia to Northern Europe has jumped from $2,000 to $9,000, according to the Financial Times, while the cost of shipping products from Asia to the West Coast of America has increased by 145 percent, according to CNBC.

 

With no one in the industry having a crystal ball to predict the future for this issue, methods have been put in place to assist companies globally, such as the creation of a new booking system. Alibaba Group’s Cainiao has launched its own container booking service, which can be used for air and sea freight in response to the global shortage of containers. This service will span more than 200 ports in 50 countries and aims to reduce the backlog of empty containers.

 

Maersk, the largest container shipping line and vessel operator in the world, has been significantly affected by the container shortage but believes that the current situation will soon improve. “It is expected that the situation will improve, bottlenecks are expected to be lifted, buying patterns likely to normalize, as well as new vessels and containers joining the market in 2021,” says Lars Mikael Jensen, Maersk's head of network and market east-west.  

 

The imbalance of global commerce, which has been exacerbated by the pandemic, lies at the heart of this problem.

 

The shortage of containers and rising freight prices are projected to continue throughout 2021, with China's commerce sector recovering at a quick pace and an inflow in demand for items rather than services.

 

VALERIE NYANYO

AUTHOR