Container Shortage in Northern China Intensifies Amid Strong Market and Red Sea Crisis

Freight forwarders are reporting a growing difficulty in securing containers from northern China. The combination of a surprisingly robust market and reduced vessel capacity due to the Red Sea crisis has led to a shortage of both ships and containers.

Hans-Henrik Nielson, global development director at CargoGulf, stated that there is a severe shortage of 40' HC containers in China, with containers barely arriving at ports in China, Malaysia, or Singapore before being loaded again. Port disruptions and congestion are causing significant challenges in equipment planning.

Nielson emphasized the severity of the situation, describing it as a week-to-week scramble. He noted that there are too many empty containers in Colombo and upper Gulf ports, and no amount of advanced equipment software can resolve the issue of port omissions.

Ligentia confirmed the shortage in a message to customers, noting that equipment stock, particularly in North China, is tight and varies daily based on vessel arrivals and the discharge of empty containers. In Shanghai, almost all carriers are lacking empty containers, especially CMA and ANL, with vessel waiting times at the port ranging from three to 14 days due to congestion. This has resulted in schedule delays across nearly all carriers.

Carriers such as Maersk and Hapag-Lloyd in Yantian, Cosco, HMM, Hapag-Lloyd, and MSC in Ningbo, and Cosco and CMA CGM in Qingdao are all struggling to obtain containers. However, Xiamen reportedly has sufficient containers.

The market remains strong, and carriers are becoming increasingly selective about bookings. Some BCOs are seeking additional quotes from carriers to handle expected excess volume in the upcoming months. Carriers have announced blank sailings for June, leading to a significant capacity reduction of 15-20%, exacerbating capacity fluctuations.

Metro Shipping noted increasing equipment challenges at more origins and advised customers to expect more of the same. Nielson added that current market demand is exceeding projections from six to nine months ago, leading to what he calls "covid19 shipper capitulation," where shippers are booking space in advance to ensure transport. He likened the situation to the philosophical concept of a "leap of faith" by S?ren Kierkegaard, where decisions are made without a rational basis, reflecting the unpredictable nature of the current shipping market.