The global shipping container shortage is a hot topic these days, but many discussions focus on disruptions to manufacturers and retailers. Those are valid issues, but how could the lack of containers affect consumers? Here’s a closer look.
Delays Affecting Once Readily Available Products
The container shortage causes a domino effect, whereby slowdowns occur across the rest of the supply chain. One consequence is that consumers may need to prepare themselves for having difficulties finding things that were previously easy to obtain.
For example, Liliana Trejo runs a bar in Spain and typically buys two bottles of Seagram’s gin every seven days to meet patron demand. However, it’s been out of stock for weeks, causing some of her customers to change their beverage preferences.
It’s a similar story at Osorno-Toyplanet, a Seville-based franchise. Carolina Osorno, the company’s owner, spoke of recent stock shortages in the warehouse during the run-up to December’s festive period, saying, “During these dates, we usually have the warehouse 95% full for Kings’ Day, and we are around 60 or 70%.”
Osorno further clarified that stocking issues stem from delays in imports coming from China, even though the company placed holiday orders as early as April. It’s not a new issue, either. She explained that summer pool toys did not come until the end of September in 2021. In the United States, Florida-based toy brand Basic Fun prioritized shipping smaller squishy toys to retailers, thereby allowing it to make the most of available container space.
Situations like these mean consumers may need to accept waiting longer to get the goods they want or find suitable substitutes. Additionally, a person might purchase a gift for the holidays or someone’s birthday that doesn’t arrive in time. Then, they could print out a picture of the item and put it in a card as the next best option to wrapping the physical merchandise.
Longer Shipping Timeframes
Modern consumers are used to getting their goods increasingly quickly, with the arrival of goods sometimes as soon as an hour after someone orders something. However, they may not see the connection between the shipping container shortage and how soon retailers can provide products to buyers.
Amazon is a primary driver of people’s ever-growing demand for speedy shipments. Since at least 2018, it has been using its resources to overcome container challenges. Estimates suggest the company now has from 5,000 to 10,000 manufactured and owned containers.
But, making containers is an out-of-reach option for the vast majority of companies.
One statistic showed it took three weeks to ship artificial Christmas trees in 2019. However, the timeframe is now an estimated eight weeks. With some trees standing seven feet tall or more, it’s increasingly difficult to find available containers to fit them. Plus, if exporters are so lucky, they must prepare to pay more to get the goods moved.
Another source showed that as of October 21, 2021, there was an average of 70 days from when someone booked a container to when a ground transportation company received it. It only took 13 days for that to happen in 2020.
However, being transparent by providing customers with honest and updated information is one of the best ways to prepare them for shipments that might take longer than expected. For example, major carriers post their holiday deadlines each year. In cases where goods don’t arrive in time, retailers could provide consumers with alternative, in-stock options as compromises.
Delays Coupled With Price Increases
Unfortunately, addressing the shipping container shortage might not immediately improve supply chain struggles. That’s because goods increasingly rely on intermodal transportation. Statistics indicated total intermodal volumes were 2.6% higher than the previous year’s levels during the first quarter of 2021.
However, statistics indicate Europe is short by as many as 400,000 truck drivers. In November 2021, Axel Mattern, a chief marketing executive at Germany’s Port of Hamburg, commented, “Issues with disturbed supply chains will remain visible at the intersection between land and marine transport. Vessel clearance is still tight at the Hamburg terminals.”
Representatives from the Port of Hamburg expect the supply chain crunch to persist until at least the end of 2021. However, a longer-term viewpoint suggests a rise in the prices consumers pay.
Higher Prices Causing Consumers to Shop Differently
In a November 2021 press release, The United Nations Conference on Trade and Development (UNCTAD) warned that if the current surge in container rates continues, the prices for global imports will increase. If so, elevated consumer prices would result.
More specifically, projections suggest global import prices could go up by as much as 11% while shoppers see prices 1.5% higher than what they previously paid. UNCTAD representatives said the negative impacts could be especially severe in developing nations.
However, they’re hurting low-income families in the United States, too. A poll found that approximately 4 in 10 Americans with household incomes under $50,000 said recent price increases significantly affected their finances.
One woman quoted in a story about inflation said her monthly grocery bill recently went up by $200. She’s switched to cheaper cuts of meat and less-expensive detergent and begun shopping for clothing for her three kids at thrift stores. The lack of containers is not the sole contributor causing inflation, but it’s one aspect.
The Shipping Container Shortage Is Not Simple to Solve
This sobering overview highlights the many factors that turned the shipping container shortage into such a massive problem. Many people mention the COVID-19 pandemic as a significant factor, which is understandable. However, there are multiple factors at play.
Addressing only one or a few of them will not likely get the intended results. Achieving positive outcomes takes time and effort. In the meantime, consumers and the parties interacting with them should prepare for the adverse effects detailed here.