Record freight container production fails to ease supply-chain crisis


Supply chains updates

Chinese manufacturers are pumping out record volumes of freight containers after shippers ordered vast stacks of the steel boxes in an attempt to smooth out disruptions in the global supply chain.

Despite the extra wave of orders, however, shipping executives are warning it will do little to ease the global ocean freight and supply problems as limited availability of containers persists after the surge in online shopping.

The world’s biggest box manufacturers, China International Marine Containers (CIMC), Dongfang International Container and CXIC Group, are struggling to meet demand, even though production has been increased with workers’ hours extended.

“The factories are running pretty hard out,” said Brian Sondey, chief executive of Triton International, the world’s largest container leasing company, which rents boxes to shipping groups.

The big problem is moving containers stuck in the wrong places quickly enough rather than the number in circulation as supply-chain bottlenecks clog up the system.

John Fossey, an analyst at consultancy Drewry, said the number of boxes in circulation globally is “adequate” to accommodate trade volumes.

“It’s more of a logistics issue than a supply issue,” he added, referring to congestion in the supply chain.

Container ships have been stranded at sea as the global shipping and supply chain crisis delays deliveries and heaps pressure on logistics groups © Mario Tama/Getty

Hapag-Lloyd, one of the largest container shipping groups, estimates that 20 per cent more containers are bound in shipments than before the crisis.

Niklas Ohling, who manages a fleet of containers for the German carrier, said there was little sign that containers, which carry everything from garments and bicycles to smartphones, were reaching destinations any faster, despite extra supplies.

The industry, which is led by the three big Chinese groups that make about 80 per cent of the world’s containers, is set to pump out a record 5.2m twenty-foot equivalent units (TEUs) this year, up two-thirds on 2020, according to Drewry.

“Never before has the global container industry produced 5m TEU plus in a year,” said Fossey.

Shenzhen-based CIMC, the industry’s largest, last month said its production and sales of containers had set a new record, selling 1.15m dry cargo containers in the half year to the end of June.

This is more than treble the amount in the same period last year, while its net profits soared from Rmb239m ($37m) to Rmb4.4bn ($680m).

Production lines in China are working flat out to manufacture freight containers © Shen Chunchen/VCG via Getty

The production increases come as container prices have more than doubled to $3,645 per 20ft box at the middle of this year since the end of 2019.

The uptick in demand for boxes has also benefited container lessors. New York-based Triton has spent $3.4bn to expand its assets by 25 per cent this year, while gaining from carriers signing…



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