The humble shipping container deserves its place in the list of inventions that changed the modern world. Its outsize role in enabling global trade is underlined by the chaos caused by a current shortage. Pandemic-induced disruption has affected the speed and efficiency of seaborne traffic. The cost of shipping goods from China to Europe has more than quadrupled in the past eight weeks.
Multiple factors are to blame. Empty containers were left stranded in Europe and the US after shipping lines cancelled sailings in the pandemic’s early months. Covid-19 has also curbed ports’ capacity, pushing up container turnround times by two-thirds to 100 days. Changing spending patterns from locked-down consumers have led to a surge in demand for goods. That would have been unmanageable even under normal circumstances, say experts.
The consequences are serious. Higher shipping costs will contribute to inflationary pressures. Manufacturers with thin margins have no choice but to pass the extra costs on to consumers. Delays and shortages will lead to lost sales, putting pressure on cash flow.