By Alan Wolf, YSN
As if vendors and retailers didn’t have enough to contend with, add a container shortage to the industry’s supply-chain woes.
Due to a confluence of factors, including inventory imbalances, stepped up trade and clogged seaports, the steel boxes are in short supply, adding to transportation costs and delivery delays for the furniture and appliance industries.
According to a report in Bloomberg News, container suppliers stopped producing the 20-foot boxes in the early months of the pandemic after trade and global demand plummeted. Indeed, Chinese manufacturers, who make about 90 percent of the world’s containers, were sitting on a 4-million-unit surplus one year ago, an industry association said.
Then suddenly, shoppers developed an insatiable appetite for furniture, appliances, consumer tech and other quarantine-inspired purchases, and demand for shipping containers soared.
Despite ramping up production, which rose to 440,000 containers in January, suppliers are still struggling to keep up with new orders. Compounding the problem is U.S. port congestion, which is delaying the return of empty used boxes and doubling the price of new ones, to more than $3,000 for a standard 20-foot unit, further driving sky-high freight rates, Bloomberg reported.
Related: The Positive Side of Port Delays
Industry executives and analysts expect the container tightness to ease by mid-year as vaccine rollouts curtail the coronavirus. But they don’t anticipate availability — or transportation costs — returning to normal until the end of 2021.
Hat tip to Bloomberg News.