Coronavirus has been all over the news recently as its impacts are felt globally.
Whilst people always take a priority, the impact on global trade and the shipping market in general is being discussed a lot less in the media.
So what has been happening in China which may impact shipping container availability and prices?:
Coronavirus and the Chinese logistics operations.
- The Chinese government effectively ‘extended’ the Chinese new year celebrations and stopped people returning to work
- Docks, and container yards are largely understaffed or not staffed at all
- Most container factories and non essential goods factories are temporarily halted.
- Regular sailings are being cancelled as services miss Chinese ports
- This is causing major knock on effects for global trade. Goods are not shipping from China, but this is also leaving the rest of the world drastically short of physical containers to load cargo.
- We expect this fall out will hit supply chains for some months to come and may have wider impacts on consumer goods due to arrive in the UK and other countries that are now not sailing.
What does this mean for the shipping industry
- Globally, container stocks are in disarray. Loaded containers are not leaving China, meaning that shipping containers are already in short supply in places like the USA, who need a good supply of containers for their own exports.
- 2+ weeks of reduced operations at Chinese ports and boats missing China altogether will cause significant knock on impacts for container stocks for weeks or months to come. This does after all represent circa 4% of annual output.
- When shipping containers are in short supply, shipping lines will suspend the disposal of older containers and they will use these shipping containers for moving freight for their customers instead.
- One major shipping line has already hinted to us that it will be stopping disposals of shipping containers circa early march 2020 for minimum 1 month.
- Shipping lines also have major crew issues. Crew for boats that have recently called at china are not allowed leave their boats, and crew rotations have been messed up, meaning some boats are needing to delay or divert for crew issues on top of, and some other boat owners are struggling to get crew to their boats as they may be stranded in China.
- With a major drop off in supply, with demand expected to remain high, this leads to a very likley short term spike in shipping container costs.
- After the dip in trade from the Coronavirus, expectations are for a very strong period for the shipping industry as they ‘catch up’ with old orders and shipments. this will likley ensure shipping containers remain in short supply for a while longer.
Ensuring best value for our customers
To try and mitigate the effects of this supply crunch, we have been aggressively increasing our stock position near doubling the amount of stock on our books over the past week. We have very strong stocks of used containers, as well as new containers that are on order from the factories in China with various suppliers.
No one can completely avoid these issues, we are expecting delays with stock en route that has yet to arrive in the UK.
No one can predict the exact level of potential price increases, but we do expect prices will strengthen over the first 2 quarters of 2020.
Specialist containers (Open tops, Flat Racks, Platforms and Tanks) are likley to be in shorter supply than standard containers, and the shortage of supply may last longer for this type of equipment which was already in short supply globally.
As ever our low cost and low overhead structure will mean we are always competitive, but if you are looking to buy a shipping containers over the next few months, the next week or two is likley a very good time to buy.
Budgetshippingcontainers.co.uk offer the UK’s largest online range of shipping containers for sale with a nationwide network of storage and conversion yards and crane equipped delivery vehicles.
If you need a shipping container feel free to browse our online range of shipping containers for sale, which also includes our ranges of flat pack sheds, container canopies and more. You can also call us on freephone 0808 1234 215 any time 9am – 7pm weekdays and our team will be happy to discuss your requirements. Alternatively, you can use our online shipping container quote form or request a telephone callback. In both cases we aim to get back to you within 1-2 working hours (may take longer for more detailed quotes).