These days during the coronavirus pandemic, with the holidays fast approaching, jampacked container ships have gotten stuck in traffic at ports, which is choking the economy. Delayed containers have become both a symptom of and a contributor to global supply chain problems. But if one looks back, cargo has generally moved more easily and cheaply now than it did before these big boxes came around, making them almost indispensable to the global economy.
The first international container ship voyage was in 1966 between Newark, N.J., and Rotterdam in the Netherlands. That changed shipping dramatically. New trade routes formed, special cranes were invented for loading and unloading containers, and bigger and bigger vessels were built.
Janet Porter, editorial board chair of Lloyd’s List, a London-based maritime information service, remembers in 1996 seeing what was then the world’s largest container ship — it could carry 6,000 containers.
“And it was seen as absolutely huge. Barriers had been broken,” Porter says. “And now … they’re just tiddlers,” she says, using a British expression for miniature. “I mean, the biggest ships are about 24,000.”
Now the boxes have additional uses
Containers are used now for more than just shipping. They’re transformed in many parts of the world into makeshift schools, restaurants, clinics and prisons. Architects in wealthier countries are turning them into high-end modular homes.
California-based company Crate Modular, for example, uses containers to make affordable multifamily apartments, temporary housing for people experiencing homelessness and school buildings.
Supply and demand up the cost
Now during the pandemic, people are buying so many more goods that it’s boosting demand and leading to a shortage of containers, which has sent their prices surging, according to Porter of Lloyd’s List.
She says they went from $1,500 for a 20-foot container and $2,800 for a 40-footer in late 2019, up to $3,000/$5,800 in 2020. Now they are about $4,000/$6,400, but she has seen spot deliveries go as high as $6,000/$8,000.
She expects that the prices will drop once the supply chain crisis ebbs.
The shipping containers can’t be unloaded at the docks fast enough to be sent back to Asia, where they’ll be used again to help meet consumer demand.
China, the world’s largest manufacturer of shipping containers, is trying to pick up slack — companies there produced 300,000 containers in September alone, Reuters reported.
But no matter how many there are, the supply chain crisis won’t be solved until the containers are more quickly unloaded and turned around.