Issues surrounding empty containers are growing

Issues surrounding empty containers are growing

Issue 580 of this week’s Sunday Spotlight reviews the analysis of the eventual normalization of supply chains and its potential impact on empty container flows. The baseline data for this model comes from Flexport Ocean Timeliness Indicator (OTI) data, which measures the time between when the cargo is ready at the exporter and when the importer receives it. Before the pandemic, the transit time averaged 45 days, compared to 112 days in February 2022, which was reduced to 88 days as of August 26, 2022 measurement.

As transit times lengthened, containers were stuck in long supply chains, which led to the first increase in freight rates in the second half of 2020, as enough empty containers could not be shipped to Asia in time. Because of the huge shortage of empty containers, carriers had to order new containers manufactured in Asia, and these were fed into a long supply chain. As transit times are now decreasing, these additional containers will be released back from the supply chain and begin to pile up, mainly in Europe and the US. The Sunday Spotlight predicted this development in February 2022, and this week they examine whether our forecast is on track.

The blue line in the figure above shows the current forecast of excess empty containers released in North America from the transpacific trade alone, and the orange line shows our February 2022 projection. 4.3 million TEU of excess containers will be released in North America, which cannot be overseas within planned network operations. This will overload empty container depots in the US, a problem that is already beginning to emerge.

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