Causes of Container Imbalance
As a first year law student, I was excited to learn about the effects of a global economic shock such as a container imbalance. My first reaction was, “Wow, that is so sad!” But after further study I realized how this event can actually help our economy. The negative economic impacts of CO VID 19, however, create a gross imbalance between demand and ability to supply. Let me take a deeper dive into this critical issue and what it means to the industry moving forward.
First, let me explain why we may be experiencing a new year scarcity in containers. Historically, supply has exceeded demand for about six months out of the year since the start of 2021. Now, even with a relatively small increase in total number of empty containers, companies are forced to operate at or below capacity. This is due to their inability to quickly identify opportunities to fill orders for new units and fulfill orders for units that were previously filled. This can have a ripple effect through the supply chain, affecting almost every aspect of your business.
In my next articles, I will discuss what we can do to prevent and remedy this upcoming imbalance. It is important to note that there have been no pandemics in the last two decades, meaning that there is no outbreak possibility from a lack of containers. However, this may create a greater opportunity to exploit this opportunity due to the size of the China consumer market.
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