There is an unpredictable shortage of shipping containers in Asia and it has never been more expensive to transport a container of goods from Asia to other parts of the world than it is now.
As factories in China, Vietnam, Taiwan, and South Korea have experienced an increasingly high demand for medical equipment during the pandemic, the Asian producer countries have produced much more than what they have imported. This has meant that empty containers have been left in the recipient countries in Europe and Asia has experienced a shortage of shipping containers. Shipping rates from Asia to Europe and the USA are also at a record high.
According to the most recent statistics from S&P Global Platts, shipping a container from Northeast Asia to the UK costs $ 10.000 which is five times as much as usual. China and Taiwan have experienced export growth since June last year but the shortage of containers in Asia could lead to higher prices and could hurt Chinese export. According to a new report by Mizuho Financial Group with headquarters in Tokyo, Japan, the record high freight rates will weigh on China’s export growth.
The lack of shipping containers in Asia has also impacted Thailand’s export of rice which fell by 28 percent in November. A strong Thai currency has contributed to the fall in export but rice exports are likely to end at their lowest level in 20 years and that has been worsened by the shortage of shipping containers.
It is mostly Chinese companies that produce new containers but no company dares to invest in new production capacity at this time as it is well-known that the need will no longer exist when the corona pandemic is brought under control.
The South Korean shipping company HMM Co. has deployed several ships on routes to the USA. The company is part of the Hyundai group and warned last week that the lack of physical containers and capacity onboard container ships is likely to continue in the coming six months.