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  • Writer's pictureEdward Lehman

Global Shipping Problems, Container Shortages Hampering U.S. Economic Recovery

The Meishan terminal at the Ningbo-Zhoushan Port in eastern China is back up and running, ending a two-week long suspension after a dock worker tested positive for COVID-19.

It could take up to 60 days for operations at the port to return to normal as workers and maritime pilots return from quarantine, which means retailers around the world will face continued disruption as they race to stock up ahead of the holiday shopping season.

The closure of the terminal was significant for global trade, as Meishan accounts for about 25 percent of container cargo through the port. It disrupted other ports in China and stretched supply chains that were already suffering from recent problems at another Chinese port.

The demand for imported goods coming to the United States is still outpacing supply. Everything from cars to clothing and everyday items ordered online during the COVID-19 pandemic has come from abroad in metal shipping containers.

Container costs from China and East Asia to the east coast of the United States have climbed to over $20,000 USD, compared with only $4,000 USD a year ago.

Boats have been backing up at U.S. ports, and empty shipping containers aren’t making their way back to China fast enough, exacerbating shipping issues.

In principle there are more than enough containers to handle global trading volumes. In practice, availability in several parts of the world has become incredibly tight because large volumes of containers are stuck in the wrong place.

The container shortage traces itself back to the early months of the COVID-19 pandemic — spring of 2020 — when consumer demand slumped and shipping lines canceled many of their routes between Asia and North America. As consumer demand snapped back during the summer of 2020, thousands of empty containers were stuck in the U.S. and exporters in China faced long waits for boxes to ship their goods.

Further events such as a grounded container ship’s blockage of the Suez Canal in March, the shutdown of Yantian port in Southern China in May and June that left some 350,000 containers idle, as well as the most recent shutdown of Meishan, and big backups at ports in the U.S. and Europe have added to the strains.

Some U.S. exporters have even said shipping lines are refusing to send boxes inland to pick up cargo because they are trying to get empty containers back to factories in Asia as quickly as possible to take advantage of historically high shipping prices for exports from the continent.

For the loaded containers that are sent inland in the U.S., congestion on rail networks and a shortage of truck chassis, drivers and warehouse workers has led to big backups at cargo facilities as companies struggle to unpack the boxes and get them back into circulation.

Truckload carriers have indicated the “average unload dwell time” for customers using containers was up 70 percent in the second quarter over the same period in 2019 because of a shortage of workers to handle the boxes.

AmChamUS finds it abhorrent that domestic companies in the U.S. are hampering the economic recovery efforts of small and medium sized businesses — the backbone of the economy — in pursuit of greater profits from the temporary price hikes in shipping containers.

AmChamUS will continue to work with members of Congress and entities such as the Federal Maritime Commission to address the negative impacts of shipping delays, increased costs and container shortages wrought on U.S. businesses.

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