The global logistics industry is facing potential shortages of containers in Asia due to continued disruption to global trade caused by Houthi attacks in the Red Sea, according to a warning from Tobias Meyer, chief executive of German logistics giant DHL.
Meyer, speaking at the Davos forum, highlighted concerns that shortages of containers in Asia could occur because there may not be enough containers to ship back to the region. This warning comes as the Red Sea crisis continues to simmer, with the Houthi armed forces attacking container ships, resulting in restricted traffic in the Red Sea and Suez Canal.
The current disruptions have led to shipping lines suspending services on the Red Sea route and diverting their ships to Africa near the Cape of Good Hope, adding approximately two weeks to shipping times. DHL’s official website also warned of potential equipment issues due to the failure of ships to return to Asia on time, leading to a shortage of equipment available for future shipments.
Data from shipping consultancy Vespucci Maritime shows that before the Chinese New Year, the volume of containers arriving at Asian ports is expected to be 780,000 TEU (international unit of 20-foot containers) less than before. This shortage crisis, combined with the peak shipments before the Lunar New Year, may become increasingly prominent in mid-to-late January.
Industry insiders have noted that carriers have begun to favor VIP customers and those with high spot deposits in areas experiencing a shortage of containers. Che Meichao, a macroeconomic analyst at Yide Futures, also highlighted concerns about the European route space being tight and the average space utilization rate of ships approaching 100%.
To address the potential shortage of empty containers, shipping companies and freight forwarders have begun to take action, such as adjusting and shortening the container usage cycle, and speeding up the return of empty containers to avoid shortages at Asian origin ports, according to data from multiple shipping platforms.
While Meyer acknowledged the potential for container shortages, he noted that the current disruptions are not comparable to the supply chain difficulties during the COVID-19 pandemic three or four years ago. However, the situation in the Red Sea is one to keep an eye on as it could have significant implications for global trade in the coming weeks.