Global container shortage drives spike in shipping rates, but brings windfall for Chinese manufacturers
- A shortage of containers and unexpected demand for delivery by sea has driven a surge in international freight rates in the second half of the year
- The shortfall is driving up costs for some Asian businesses, but proving a boon for Chinese container manufacturers who are running close to full capacity
Freight carriers are facing a shortage of shipping containers amid a wave of demand for delivery by sea, helping drive up rates and increasing supply chain costs for some businesses across Asia.
Triton International, one of the world’s largest container leasing firms, said in a presentation to investors last month that pick up in demand for its containers had sped up in the third quarter and utilisation was nearly at full capacity.
The company has ordered US$725 million worth of containers for delivery this year, but order volumes for the fourth quarter have been limited by manufacturing capacity – mainly in China, which is the world’s largest producer of containers.
According to Triton, all available dry containers are booked and Chinese factories are running at full capacity, taking orders for delivery in February and March.
In August, container production in China increased by more than 61 per cent from a year earlier to 7.8 million square metres (84 million sq ft), according to the China Machinery Industry Federation. This marked the first time growth had turned positive since August 2018.
