The operational impact of rising empty container shipments is significant, with one in three containers now shipped empty, up from one in four before the pandemic. This increase is primarily due to global trade imbalances, which force carriers to reposition empty containers to meet demand.
Rising Empty Container Shipments
According to Danish consultancy Sea-Intelligence, 30% of global container shipping work now involves moving empty containers, compared to 24% pre-pandemic. The volume of empty containers shipped has increased by 65% since Q1 2019, while full container shipments have only grown by 17%. Total demand, measured in TEU-miles, has grown by 40%.
Impact on Freight Rates
The cost of repositioning empty containers is absorbed by carriers, leading to increased freight rates for head-haul shippers. Sea-Intelligence warns that these costs are ultimately borne by shippers on high-volume lanes, as the industry grapples with the inefficiencies caused by trade imbalances.
"The added cost of these imbalances will result in increased costs – and hence freight rates – for the head-haul shippers," notes Sea-Intelligence.
Affected Trade Lanes and Ports
The impact is felt across major trade lanes, particularly those with significant imbalances between import and export volumes. Ports experiencing high volumes of empty container movements include the Port of Shanghai and Port of Los Angeles.
| Metric | Pre-Pandemic | Post-Pandemic |
|---|---|---|
| Empty Container Share | 24% | 30% |
| Empty Container Volume Growth | - | 65% |
| Full Container Volume Growth | - | 17% |
Recommendations for Shippers
Shippers should anticipate higher freight rates and consider strategies to mitigate costs, such as optimizing container usage and exploring alternative routes. Collaboration with carriers to improve equipment repositioning efficiency may also be beneficial.
Watch List
- Carrier Alliances: Changes in alliances could impact capacity and rates.
- Port Congestion: Monitor congestion levels at key ports like Shanghai and Los Angeles.
- Trade Policy Changes: Any shifts in trade policies could further affect container flows.
