Australia is being badly affected by a global shipping container shortage. Take a look at the reason for this issue and what can be done about it.
“It’s on its way” is a phrase we have come to interpret during COVID times as “It will get there when it gets there”, particularly when it comes to overseas deliveries.
The issue many Australian people and businesses are encountering at the moment is significant delays and disruptions due to a global shortage of shipping containers. So what is going wrong and what are the options for getting hold of products and supplies?
The global shipping container shortage
In the leadup to 2020, goods travelled around the world in a relatively predictable way. Major brands were sending goods by air or sea on a daily basis so if something was ordered you would get an estimated due date and there was unlikely to be an issue with its arrival.
Then COVID got in the way of things. All of a sudden, passenger flights have been slashed. As a result, there are fewer opportunities to order goods to arrive by air. For many companies, shipping becomes the only option, resulting in a big squeeze on shipping container supplies.
To make matters worse, many shipping containers are out of operation at the moment, grounded while companies attempt to minimise costs. According to freight forwarding company Hillebrand, “Many factories closed temporarily, causing large numbers of containers to be stopped at ports. To stabilize costs and the erosion of ocean rates, carriers reduced the number of vessels out at sea. Not only did this put the brakes on import and export, it also meant empty containers were not picked up.”
Due to the lack of availability, the other issue caused by the shipping container shortage is that prices have started to climb skyward. CNBC recently reported that “An ‘aggressive’ fight over containers is causing shipping costs to rocket by 300%.”
Companies all over the world rely on shipping, and with the squeeze on availability, it’s little wonder prices are going up. It all comes back to supply and demand after all.
Shipping container solutions
While there is an imbalance in availability, one solution is to build more shipping containers. This makes sense, but with materials being in short supply, it’s not something we should hold our breath for in the short term.
The main thing to do is be realistic and anticipate shipping container delays, even if you are promised a delivery date in writing.
And in the meantime, it’s all about coming up with a workable Plan B. Perhaps there are other products to offer during COVID, or old stock which can suddenly be useful. Some Australian brands have pivoted and capitalised on international supply shortages, suddenly finding they are able to be competitive due to unavailability from China and other countries.
The good news is that once items are in Australia it is relatively easy to organise transport. Delays are more likely to be a few days or a week, rather than months at a time. When there is no lockdown, it is pretty much business as usual and rates remain competitive.
Want to explore freight options in Australia? Talk to the experts at EFS