The Chief Executive Officer (CEO) of the world's largest container manufacturer, China International Marine Containers (CIMC), predicts that the well-publicised equipment crunch will persist into 2021.
Speaking at the company's annual general meeting on 2 June, chairman and CEO, Mai Boliang said that after monitoring the market, the slow return of empty containers will still plague the industry.
Mai noted, "The problem is not insufficient supply, but the poor circulation of containers. There are two main reasons: one is that the world's 20 busiest ports are currently in "traffic jams", with ships queuing, and empty containers cannot be shipped back; the other is that new Covid-19 outbreaks have caused many countries and regions to suspend economic and industrial activities."
The equipment crunch is such that to describe the situation, the Chinese have coined the phrase "Yi Xiang Nan Qiu", literally meaning "one container is rare".
Combined with tight shipping capacity, freight rates have been firming. In May, the Shanghai Containerised Freight Index (SCFI), which reflects the spot market, averaged 3341.69 points, an increase of 18.1% from April.
Mai added that CIMC plans its strategies every fortnight, based on the company's market monitoring model, and it is from the data generated that the company expects no near-term resolution to the equipment crunch.
CIMC has a global market share of 42%, while since the 1990s, China has churned out the most containers in the world, and the three largest box makers, which are all Chinese, command a combined market share of 82%.