According to UNCTAD 2020 data, more than 80% of world trade takes place by sea. In the shipment of goods, container transportation is very important due to reasons such as saving time and money, having high load carrying capacity at one time, being fast and safe. However, container transportation decreased by 5.1% in the first half of 2020 compared to the same period of the previous year, due to the Covid-19 pandemic.
The Covid-19 pandemic has caused major changes in almost all industries worldwide. Serious problems arose in maritime transportation, which is one of the main stones of world trade.
With the start of the Covid-19 outbreak in China in early 2020, production in many countries came to a halt. Due to the quarantines, the number of port employees decreased and as a result, port handling times were extended. With the belief that the virus would spread through ports, ships going from China to the United States and Europe were quarantined for certain periods. Before the pandemic, it took 1-2 days for the containers to be shipped to the inner regions of the United States, while this period was extended up to 1 week due to reasons such as loss of workforce after the pandemic, reduced working hours, and trucks that were not working.
Continuing production in China, which quickly controlled the epidemic, increased the supply. However, as the return of containers to China was delayed, the supply could not be met, and an empty container shortage emerged. The fact that all containers were reserved by China resulted in an almost 100-300 percent increase in freight prices, as can be seen in the Shanghai Container Freight Index (SCFI) chart in Figure 1. The goods whose transportation costs are more expensive than the price of the goods have started to disappear from the market.
Source: Shanghai Shipping Exchange
Figure 1. Shangai Containerized Freight Index
In Turkey, the reduction in imports due to rising exchange rates, triggered the lack of empty containers in the country. Exports were also adversely affected by this empty container shortage.
Although it is difficult to give an exact number, the total number of shipping containers around the world can be said to be in the range of 23-26 million. In addition to the very limited number of shipping container manufacturers, more than 85% of production is represented by China. According to Trade Map 2019 data, container manufacturers in China, representing 68.3% of shipping container exports in the world, said that they were working at full capacity in 2021 to meet the demands.
In order to end the container crisis, accelerating production and providing incentives and loans to producers are also of great importance.