U.S. Exporters Face Shipping Container Shortage

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A global shortage of shipping containers has recently hurt U.S. exporters. The Ocean Shipping Container Availability Report (OSCAR), a weekly record detailing the availability of marine shipping containers at 18 different intermodal locations, illustrates a decline in container volume at major domestic break-in-bulk points, such as Chicago and Kansas City.

Although seasonality may partially account for this decrease in shipping container supply, certain factors are heavily contributing to the shortage. This past year, many carriers began cutting down on overcapacities while others went bankrupt, including South Korea’s Hanjin Shipping. Additionally, the increasing volume of international trade has contributed to a tighter market for shipping containers. Specifically, Asian import markets have seen a positive demand shock in recent months for shipping containers, whereas “importers are routinely outbidding exporters and shipping lines are moving boxes entirely empty back to Asia”.

Yet, the biggest factor contributing to the current container shortage stems from China. As they manufacture 90 percent of all shipping containers used globally, an effort by Chinese firms to begin coating containers with environmentally-conscious water-borne paints that release less toxic fumes than oil-based paints has interrupted production of shipping containers. Additionally, because the water-borne paints are more expensive than their oil-based counterparts, their widespread use is driving up the price of shipping containers. While China aims to limit emissions, this environmentally-rooted initiative has faced much criticism as it threatens the spike in volume of maritime shipping and international trade.

The shortage resulting from the convergence of all of these factors has hurt U.S. exporters relying on maritime trade. However, as consolidation occurs in the shipping container industry, the supply of containers will adjust in the long-run to meet the needs of U.S. exporters.

Ryan DelGaudio for the South Florida District Export Council