How to Cope with Container Shortage for Shippers and Forwarders

8-minutes Read

How to Cope with Container Shortage for Shippers and Forwarders

In the past year, China’s demand of containers for cross-border transactions vastly exceeds supply. The shortage of containers is due to trade imbalance and impact from the COVID-19 pandemic overseas: exports from China surged significantly, but imports and containers returning to China have reduced. The number of voyages decreased due to factory shutdowns and massive lay-offs. Meanwhile, congestion at US west coast ports, the Suez Canal incident and stressful food supply chain in European countries under home quarantine measures also intensified the problem. Increasing new ship orders and container production are long-term mitigation measures that cannot meet the current urgent needs.

In accordance with usual practice, freight forwarders need to submit the booking information of the shipping company (vessel name with voyage number and type of containers) and loading plan (loading address / time) to the fleet. The fleet will ask to release the shipping space and get the Equipment Interchange Receipt (EIR) for picking up the containers in container yard.

What can shippers and freight forwarders do to deal with the global container shortage? Let’s listen to professional advice from experts:

Firstly, the shipper/consignee should book the cargo space as early as possible, and notify the freight forwarder or fleet to print Container Release Order after receiving the Shipping Order. In this way, you can create a response plan in advance and know where to pick up the containers and when they will be released, and also get to know whether there is a container shortage or whether multi-location pick-up is allowed.

Secondly, in case of shortage, shipper/consignee can pay a handling fee to shipping company for booking a designated container with specific number instead of just booking for cargo space. By doing so, loading can proceed once the goods are packed and ready.

Furthermore, if there is completely no container available, you can still check with container yards if they have slightly damaged containers available for repair and renewal if possible.

In addition, it is important to check with the shipping company whether there is a shortage of containers. In such case, you can book the cargo space from other shipping companies. If there is just shortage of big ones, you can ask to replace a large container with two small ones or use other type of containers.

Finally, shippers/consignees and freight forwarders could compare the cost and time among air and rail transport according to customers or company’s own situation, and also take China’s intermodal transport policy and China-Europe rail policy into account, consider if it is necessary to adjust and design a new transportation route to cope with the current situation.

TradeFi is a fintech company based in Guangdong-Hong Kong-Macau Greater Bay Area. With the support of financial opening and innovation policies in China and advanced financial technology, we leverage our financial expertise to operate TradeFi, and partner with the world’s leading shipping company. TradeFi is a trustworthy trade financing platform for SMEs, striving to solve the financial problems for small-to-medium sized freight forwarders.

AI Link Group Limited, through its affiliates, AI Link Finance Limited and DeepAuto Limited (collectively “ALG” or “AI Link”) operates TradeFi, a financial technology platform that provides trade finance to customers in Hong Kong and Mainland China.

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