There are currently not enough containers in the world to handle the vastly large cargo demand. It is no surprise that the shortage of boxes was sure to contribute to inflammation due to demand “outstripping the availability of containers” however, after months of this container shortage, how bad does the issue remain?
Two of the top public leasing companies — Triton International (NYSE: TRTN) and CAI International (NYSE: CAI) — commented on container availability as they reported Q1 2021 results. Generally speaking, the more profitable the market conditions for container lessors, the tighter box capacity is and the more cargo shippers must pay liners for transport. The bad news for U.S. importers and exporters: Equipment lessors see smooth sailing ahead, likely into 2022. The global container shortage will seemingly last until 2022.
Overall, the issue stands with production of these containers. Production has increased 6%-8% in container capacity this year. Although containers are being produced, they are not being built fast enough to ease the capacity crunch. John O’Callaghan, global head of marketing and operations at Triton, said during his company’s call, “Despite the factories ramping up container production activity at the end of last year and beginning of this year, inventories of new containers remain very low. What’s sitting on the ground roughly represents only two to three weeks’ supply.” Let’s also not forget about the many containers being held up in port congestion and by issues such as the Ever Given accident in the Suez Canal. We all hope these logjams clear up and more containers have been built as demand has risen ever since the pandemic situation.