As Nigeria Battles Abandoned Empty Containers, Shortage of Containers Hits Chinese Port

Even as Nigeria continues to grapple with port congestion and abandoned empty containers at its port by major shipping lines, ports in China, especially Shanghai, has been hit by shortage of containers.

Stakeholders at Nigerian ports have lamented that shipping lines have turned Nigeria into a dumping ground for empty containers, especially with most of them having no empty containers holding bays.

Apart from these, vessels call at Nigerian ports with thousands of loaded containers, but they refuse to pick up empties on their return voyages, despite the presence of Nigerian Ports Authority (NPA) Nigeria Customs Service and other agencies that are supposed to enforce this.

Recall that Covid-19 pandemic has brought a change to global shipping trade, as many ports abroad are now battling with lack of containers, most of their containers are trapped abroad, especially in developing countries.

Chinese Shipping executive, Howard Xiong said his office since September has been frantically calling ocean liners and agents to book containers for his clients.

“This has proved to be a daunting task as containers are in short supply. With exporters scrambling to meet delivery schedules and commitments, shipping freight rates from China have surged by more than 300 per cent since March”

“During my 25 years in the industry, I have never seen such an acute shortage of containers,” said Xiong, an assistant general manager with freight forwarder Shanghai Jump International. “The Covid-19 pandemic has brought a dramatic change to the shipping business in Shanghai, for better or worse.”

“The question is whether the booming exports and surging shipping demand will last”

China’s exports hit an all-time monthly high in November, climbing 21.1 per cent year on year to US$268.1 billion, while imports grew by 4.5 per to US$192.7 billion in the same period. This helped to widen the trade surplus by 102.9 per cent to US$75.4 billion from the same period in 2019.

With imports in China falling way short of exports, container vessels leaving overseas ports have not been able to reach full capacity.

As a result, containers have been stacking up at container yards abroad while ports in mainland China, including Shanghai, Xiamen and Ningbo have insufficient inventory of containers for exporters to use.

Xiong said his clients looking to book a shipping space on a vessel bound for North America would have to spend an additional U$$3,000 for a premium service that guarantees containers, priority loading and shipping.

Ocean carriers that used to charge US$1,200 for transporting a container to the west coast in the US in March were charging US$5,000 in November. The rates have stayed at this level as Shanghai port still lacks containers to meet exporters’ demand.

“The market was crazy in October and November because some clients failed to get containers for loading even when they were willing to pay a much higher freight rate,” said Xiong. “The shortage problem has still not been fully resolved.”

Lu Ming, an agent with Shanghai Ocean Shipping Agency, said shipping companies have benefited from the rising freight rates because of the imbalance of exports and imports via China.

The freight rates will come down when foreign economies and business activities return to normal, he added.Currently, ocean carriers were transporting empty freight containers on vessels bound for Chinese ports to help ease the shortage.

However, the problems do not end here for exporters. Major container ports such as Shanghai are grappling with congestion, forcing exporters to wait for as long as a week to get their shipment loaded.

This is not the first time this year that the logistics industry in Shanghai has had to deal with congestion, which caused cargo rates to surge.

In April, soaring export orders for Chinese personal protective equipment led to a fourfold jump in air freight rates from Shanghai international airport to North America.“We still need more imports to ease the containers situation here,” said Xiong.

“The past four months have been just too hectic for all of us. We hope everything can go back to normal soon.”