4.3 million TEUs pouring into the port! Empty boxes trapped in the supply chain may flood US warehouses

2023-09-16
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Author:Easy foreign trade

4.3 million TEUs flooded into the port on e-commerce platforms! Empty boxes trapped in the supply chain may flood US warehouses

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Empty boxes trapped in the supply chain

Or it may flood US warehouses

Recently, Sea Intelligence has reanalyzed the potential impact of the final normalization of the supply chain on the flow of empty containers and stated that 4.3 million TEUs of empty containers may enter US ports.

The basic data of this model comes from the Flexport Ocean Timeliness Index (OTI) data, which measures the time it takes for the exporter to prepare the goods and the importer to deliver them.

Alan Murphy, CEO of Sea Intelligence, pointed out: "Based on measured data on August 26, 2022, before the pandemic, the average transportation time was 45 days. In February 2022, the transportation time reached a peak of 112 days, and now it has decreased to 88 days

With the extension of transportation time, containers are "trapped" in longer supply chains, and there is a clear shortage of empty containers that can be transported to Asia in a timely manner, which led to a surge in freight rates in the second half of 2020.

4.3 million TEUs of cross-border e-commerce logistics are flooding into the port! Empty boxes trapped in the supply chain may flood US warehouses

The report states that due to a severe shortage of empty containers, shipping companies have had to order new containers in Asia and transport them to congested supply chains.

As transportation time shortens, these additional containers will once again be released from the supply chain and begin to accumulate in ports such as Europe and the United States.

Sea Intelligence predicted this development in February 2022 and analyzed this week whether its predictions were on track.

4.3 million TEUs flooded into the port on e-commerce platforms! Empty boxes trapped in the supply chain may flood US warehouses

▲ Prediction of the number of empty containers

The blue line in the figure shows Sea Intelligence's prediction that excess empty containers can be released in North America through cross Pacific trade alone, while the orange line shows its prediction starting from February 2022.

If the transportation time returns to 'normal' by early next year, there will be 4.3 million TEU of excess containers entering the North American region that cannot be transported out of the planned transportation network operation. This may flood empty container warehouses in the United States, and this problem is already beginning to emerge, "Murphy pointed out.

"If transportation time is back to 'normal' by early next year, we will see the release of 4.3 million TEU of excess containers into North America, which cannot be expanded within the planned network operations" Noted Murphy

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