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The Container Conundrum

June 23, 2023 Kevin Baxter


Shipping containers were in short supply as recently as early last year, but the industry's response of adding more containers has left many feeling empty as volume has evaporated. In other words, the transportation market is dealing with a container conundrum: too many containers for not enough freight - a problem unthinkable not very long ago.A response to a need

During the two-year shipping peak of the pandemic, when consumer demand for goods was running particularly hot, capacity was at a premium. And one variety of capacity that was hard to come by was the shipping container - a problem considering containers are a necessity in ocean and intermodal freight.

The reasons for the container shortage were both that there were not enough usable containers in existence, and that because of pandemic-related shutdowns (along with uneven un-shutdowns), many containers were sitting inaccessible. The unevenness - along with labor shortages in some areas which also slowed movement - led to an imbalance, with some regions finding containers particularly hard to come by, while others had plenty.

The solution? More containers! In some cases, containers were used a bit beyond their normal 15-18 year shelf life. But the longer-term goal was to produce more. Just as with other products, container manufacturing was affected by pandemic-related shutdowns and supply chain issues, so the replenishing of container stock did not happen right away. It did happen, however, and by late last year - just months after stories of container shortages - there were stories about too many containers.

The container surplus

The response to extreme capacity demand for many was to ensure containers would never be in short supply again. As supply of materials and labor came back online, container production accelerated. But as that occurred, so too did a downturn in consumer demand thanks to inflation and a variety of other economic factors.

That meant freight movement slowed, with both traditional peak season and the traditionally busy holiday shipping season falling well short of normal in 2022. The combination of that volume slowdown along with the increased production of containers meant that shipping container shortages quickly became a thing of the past, and a container surplus was born.

The other angle, too, is ownership. Again, in response to what seemed like endless demand, asset carriers overbought. Additionally, some large shippers acquired their own containers to avoid being burned. There are still leasing companies, freight forwarders and NVOCCS that have more containers as well. And even others purchased new containers as an investment, with the idea of reselling them for profit, but without the demand, there's no profit to be had currently.

All of this means not only are there too many containers, there are also more container owners than ever before. And now, as a prolonged freight slowdown continues, empty containers - many of them shiny and new - are sitting at ports, inland depots, warehouses, distribution centers, railyards, and even former Denny's restaurants.   

What's next for shipping containers?

For many dealing with excess shipping containers, it's time to wait and see. But waiting has also meant fees to leave the containers at some locations, like ports. So some are piling up on company-owned land. There are also alternatives under consideration, including repurposing containers for affordable housing, gardening, walls or fences, art installations or simply using them for storage. But just as container production boomed for a period last year, it's back to a bust as containers are currently on the wrong side of the supply and demand equation.

Looking for help finding container space or moving your own containers? Drop us a line and we can find you a creative solution to your container issue - whatever it may be. For more information about InTek, or logistics and supply chain issues in general, check out our Freight Guides.

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