The Great Empty Shipping Container Shortage Challenge & The Role of Visibility

The Great Empty Shipping Container Shortage Challenge & The Role of Visibility

When the COVID outbreak began nearly three years ago, lockdowns and limited operating hours at ports worldwide set off a chain reaction of disruptions that led to severe container shortages. Even as economies emerge into a post-pandemic reality, shippers continue to feel the effects. Empty shipping containers sit idle in gridlocks while the world waits for products. Issues slowing the shipping process often come down to a lack of data and problems that better visibility and tracking could solve.

Hundreds of vessels sit at a dock or anchored just outside ports waiting their turn. When dock workers can't unload cargo, shippers can't return empty shipping containers. A lack of real-time visibility into shipping status exacerbates ongoing container shortages. Attempts to help reduce the bottlenecks include ports operating around the clock, but that hasn't solved visibility issues. Modern solutions, such as a container tracking API, must be integrated into other systems to help reduce the container shortage by getting empty shipping containers back in the rotation.

What’s Driving the Container Shortage?

The container shortage crisis dominated headlines throughout 2021 and into this year. Struggles with staffing ports and retaining drivers for drayage led to a shortage of workers moving goods. As a result, empty shipping containers are stacked up with fewer hands available.

Agricultural commodity exports declined at ports because NVOCCs would deliver imported products and leave for a return voyage with empty containers rather than waiting to refill them with export products. By April 2021, the largest carriers were transporting an increased number of empty containers (104%), resulting in a 35% decrease in loaded exports.

More than 12 million containers in the U.S. were shipped empty between January and October. With some carriers hauling over 75% of containers empty on the return voyage, ports had far more loads coming in than going out. This trend reached critical mass at the Port of Los Angeles in late November. The nation's largest port reported receiving 30% more than its typical 90,000 containers in a week, leaving an estimated 65,000 empty shipping containers waiting for reallocation.

However, the container shortage was by no means limited to the Port of LA. By the end of 2021, only 40 of every 100 containers received at U.S. ports subsequently carried exported goods on a return trip.

The start of a new year brought more of the same as the container shortage continued. Finally, in April, U.S. lawmakers approved litigation to curb cargo ships from prioritizing empty shipping containers over exporting American goods at U.S. ports. As a result, increased demand and the price of imports have shifted the priority for shippers, and fewer vessels are leaving ports empty. While this is a step in the right direction, the container shortage will continue as it will take time for ports to work through the extensive backlogs. 

Challenges Caused by Empty Shipping Containers Not Getting Reallocated

The volatility of port backlogs has created many unknowns in the shipping process. Shippers, freight forwarders, freight brokers, and carriers are left to deal with the container shortage fallout caused by stockpiled containers and stalled loads.

Lack of visibility has created challenges for shippers waiting on goods and carriers waiting to unload or pick up empty containers. In addition, with a bottleneck at the port, the situation has become more confusing as containers are left sitting or moved to make space for other shipments.

Despite legislative efforts to shift the focus from returning empty shipping containers overseas, domestic exports continue to pile up as containers aren't getting back to the shippers who need them.

How Increased Container Visibility can Shorten Reallocation Timeframes

Increased data and insights on container movement and positioning will help freight forwarders, BCOs, NVOCCs, ports, and other industry players respond proactively and improve logistics planning. Here are some ways improved container tracking can help streamline the reallocation process and alleviate the container shortage.

Reducing Congestion at the Port

Tracking containers can help reduce the risk of a "lost shipment" and keep carriers in the loop. By monitoring cargo status in real-time, companies can act on foreseeable delays before they cause a problem.

Lowered Demurrage and Detention Fees

When status updates indicate that a container is empty and ready for retrieval, it's time to act. First, reduce unnecessary demurrage and detention fees due to poor visibility. Bottlenecked ports often pass along expenses to the companies responsible for leaving empty containers behind.

Updates for Pickup Clarity

Real-time updates also help speed up the loading process, so cargo isn't waiting while empty ships sail back to get more imports. The more accurate your information is, the easier it is to connect with other logistics partners and move cargo smoothly.

Container Shipping Visibility with VIZION API Helps Solve the Container Shortage

The container shortage is real, and it is relentless. Overcoming it requires being able to track containers to access essential data at every step of the route. Whether monitoring containers headed for coastal ports or rural locations, increased end-to-end data makes it possible to provide timely updates and plan for future operations. Artificial intelligence and other technologies can use your real-time tracking data with market forecasts to recommend efficient routes, relocation, maintenance, and repair for containers, minimizing their downtime.

It's essential for today's logistics players to know exactly where equipment and shipments are. Improved tracking methods are helping companies reduce costs and improve efficiencies in the supply chain. If you want to learn more about how no-code/low-code container tracking could help streamline reallocation to eliminate empty shipping containers, schedule a demo with our expert team today!

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