How Three Chinese Companies Cornered Global Container Production
Never before has the humble ocean shipping container been this important to American business. If you can’t get one, you can’t move your international cargo and supply has never been tighter. The cost of global trade is now contingent on how many containers exist, where they are and where they aren’t.
How many containers exist is controlled by China. Virtually every ocean shipping container in the world is built there.
Just three Chinese companies account for the majority of production, with Chinese factories now building more than 96% of the world’s dry cargo containers and 100% of the world’s refrigerated containers, according to U.K. consultancy Drewry.
Synopsis
Any hope for a return to more normal conditions this year was quashed with the beaching of the Ever Given that stalled traffic through the Suez Canal for almost a week in late March.
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Most logistics experts agree the situation can’t stay this disrupted forever, but there’s a growing sense that relief might not come until 2022. Even those sentiments are part guesswork.
Container shipping rates are heading higher again, driven to new heights by unrelenting consumer demand and company restocking from Europe to the U.S. that are exhausting the world economy’s capacity to move goods across oceans.
Container shipping rates are heading higher again, driven to new heights by unrelenting consumer demand and company restocking from Europe to the U.S. that are exhausting the world economy’s capacity to move goods across oceans.
After peaking in late 2020 and not budging much through the first quarter, the rate for a 40-foot container to Los Angeles from Shanghai hit $4,403 last week, the highest in Drewry World Container Index data going back to 2011. Cargo shippers on less-traveled transatlantic routes are feeling the sting, too: Rotterdam to New York surged to a record $3,500.
With their fiscal and monetary floodgates wide open, countries with advanced vaccine programs are countering Covid-19 headwinds of unemployment, weak services industries and restricted travel. But the wave of stimulus buoying consumption has inundated the supply side the manufacturers of goods that often rely on global distribution chains.
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By Brendan Murray (Bloomberg) Container shipping rates are heading higher again, driven to new heights by unrelenting consumer demand and company restocking from Europe to the U.S. that are exhausting the world economy’s capacity to move goods across oceans.
After peaking in late 2020 and not budging much through the first quarter, the rate for a 40-foot container to Los Angeles from Shanghai hit $4,403 last week, the highest in Drewry World Container Index data going back to 2011. Cargo shippers on less-traveled transatlantic routes are feeling the sting, too: Rotterdam to New York surged to a record $3,500.