Ocean Carriers Scramble to Beat Box Shortage

Ocean Carriers Scramble to Beat Box Shortage

Maersk Line is rejecting some shipments and retrieving empty ocean containers from customers more quickly to help offset a shortage of containers, according to Bloomberg News.

“There are hundreds of little things that we are trying to do, but at the end of the day there is a shortage and we can’t fix that,” Soren Karas, head of Maersk Line’s South China operations, told Bloomberg News Wednesday in Hong Kong.

Maersk has reactivated idled vessels to help relocate empty containers and ordered new boxes after a larger than expected jump in shipping demand squeezed supplies. The global container fleet shrank 4 percent last year, according to Textainer Group Holdings, the world’s largest container-lessor, as lines cut spending on new units amid the global recession and slumping world trade.

“It’s the first time in many years that we are seeing consistent equipment shortages in many areas of Asia,” said Claude Lebel, senior vice president for Asia at CMA CGM. Shipping demand “is still growing much faster than we were expecting.”

Manufacturers may produce the equivalent of 1.5 million 20-foot containers this year, up from 200,000 last year, Lebel said.

The container shortage may persist through the third quarter before easing in the last three months of the year, Karas said. “This is not healthy for us,” Karas said. “We like balanced supply and demand.”

The shortage of boxes has been compounded by shipping lines operating vessels more slowly to pare fuel costs. This means that journeys take longer and that containers spend more time onboard vessels.

Liner companies including Cosco and China Shipping Container Lines have also imposed extra surcharges this year citing the shortage of boxes. Cosco, for example, announced surcharges on shipments to Taiwan from Shanghai from July 15 because of a container “imbalance.”

The combination of levies and rebounding demand has pushed freight rates to near historical highs, according to the Hong Kong Shippers’ Council, a group representing exporters and traders in the city.

“Shipping lines are just maximizing their profits now,” said Sunny Ho, executive director of the council. “Since they have imposed peak season and other additional surcharges, they should be delivering better services and boosting their shipping speeds.”

-- Contact Peter T. Leach at pleach@joc.com.