China container maker reaping rewards as Suez Canal blockage adds to global shortage, demand set for record high

China International Marine Containers (CIMC) has seen the price of their 20-foot standard container (TEU) more than double from a year earlier to above US$3,500

The blockage of the Suez Canal by the Ever Given ultra-large container ship has created a backlog of hundreds of vessels, which is set to further exacerbate global container shortages

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The Suez Canal, a major waterway for global trade connecting the Mediterranean Sea and the Red Sea, reopened on Monday after the Ever Given container ship had blocked it for nearly a week. Photo: TNS

Published: 7:30pm, 31 Mar 2021Updated: 10:30pm, 31 Mar 2021

Worsened by the recent Suez Canal blockage, global demand for containers could hit a historic high this year, further pushing up costs of shipping, according to the world’s largest container manufacturer.

During the coronavirus pandemic, the price of a 20-foot standard dry storage container (TEU) more than doubled from a year earlier to above US$3,500, and it is not expected to fall much for the rest of year, as demand for the containers and the cost of the raw materials needed to build them remains high, said Mai Boliang, chief executive of China International Marine Containers (CIMC), which produces around half of world’s containers.

“We have full orders for the first half of 2021, and expect the demand for containers to set new records this year. The latest blockage at the Suez Canal could worsen the shortage of containers for a longer time,” said Mai on Tuesday.

The Suez Canal, a major waterway for global trade connecting the Mediterranean Sea and the Red Sea, reopened on Monday after a container ship that had blocked it for nearly a week was refloated.

But it could take days or weeks to clear the backlog of hundreds of vessels, and analysts are worried that the delays could slow down empty container handling at ports and further exacerbate shortages.

“The knock-on effect to supply chains is also complicated by the congestion at many ports in Asia and Europe. While the absence of a week’s worth of Suez-routed arrivals may help clear immediate backlogs, [there is] a wave of new arrivals and the need to rapidly move products onwards from ports,” said analysts from Panjiva, a trade database under S&P Global.