Inflation watch: Shipping container rates and prices soar on U.S. customer demand
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With U.S. policymakers increasingly paying attention to signs of inflation, one product is seeing significant price spikes: shipping containers.
Yes, those 20- or 40-foot boxes that deliver the fridge your ordered, or the fancy cheese that goes inside. Strong consumer demand from the United States and other countries is gumming up the global economy.
Here at Marketplace, we’ve been reporting ad nauseam that Americans buy more services than goods. But these days, not so much.
“People aren’t able to spend on going out, holidays, et cetera,” said Simon Heaney, senior manager of container research at the shipping consultancy Drewry. “Some people have built up quite nice disposable incomes, and it’s gone into physical goods that are generally shipped in containers.”
Clogged U.S. ports don’t have enough cranes or workers to handle everything, so containers are stuck in transit.
“It’s not so much a shortage,” said Doug Grennan, vice president of the agricultural supply chain company Scoular. “It’s more about capacity, or what I might call a velocity shortage within the actual supply chain.”
These traffic jams in North American are creating a shortage in China, where almost all containers are manufactured. New containers are selling for $3,400, nearly double the typical price, said Florian Frese, marketing lead at the logistics firm Container xChange.
“Obviously right now [is] a golden time for Chinese container manufacturers, because they produce as much as possible and can basically charge whatever price they want,” Frese said,
To serve shipping demand, Chinese exporters are also paying top dollar to deliver empty containers from North America.
“There was a report I read this morning, from a very knowledgeable source, that 70% of vessels departing over the last two months out of Long Beach [California] were filled entirely with empty containers,” said Steve Kranig, director of logistics at the agricultural shipping services firm IM-EX Global.
All these hassles have raised shipping prices, causing a few toy factories in Asia to reportedly stop deliveries for now. And some food and grain firms have turned to bulk ships with loose piles of cargo rather than container vessels.
Thinking outside the, you know, box.
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