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Global Container Shortage: China Increases Production, Governments Implement Solutions

April, 20 2021

The global container shortage has persisted since the onset of COVID-19, further exacerbated by the Ever Given crisis, where the massive Evergreen-operated vessel ran aground and blocked the Suez Canal, disrupting global shipping and causing immense financial losses.

A Crisis of Multiple Factors

This container shortage crisis is a compounded issue, affecting the entire global trade and logistics sector, as 80% of global trade relies on maritime transport—historically known for low-cost logistics, but now experiencing high shipping costs, expected to remain elevated until late 2021.

The primary causes include:

1. COVID-19 disruptions:

   • Economic activities were halted due to pandemic restrictions, causing labor shortages in ports.
   • U.S. and European import demand surged, outpacing exports, leading to a container imbalance with empty containers accumulating in the West instead of returning to Asia.
   • High costs associated with repositioning empty containers back to exporting countries.

2. Ever Given Incident (March 23, 2021):

   • The Ever Given container ship (20,000 TEUs) ran aground, blocking the Suez Canal—a vital global shipping route connecting Europe, Asia, and East Africa.
   • This delayed global shipments for weeks, intensified the container shortage, and caused massive economic losses worldwide.

China’s Response: Increasing Container Production

To address the container crisis, both private and government sectors have introduced measures. China, as the world’s leading container producer, resumed production in October 2020 after a temporary halt.

• Container production surged by 111.8% year-over-year, significantly improving East-West trade routes.

Thailand’s Government Measures to Address Container Shortage

The Thai government has also taken steps to mitigate the crisis through the Port Authority of Thailand (PAT):

1. Bangkok Port (Khlong Toei Port) Initiative

   • Reduced container handling fees for empty import containers by 1,000 THB per TEU.
   • Effective for 3 months (January–March 2021).
   • Total budget: 5.28 million THB.

2. Laem Chabang Port Initiative

   • Compensated lifting fees for import businesses at Laem Chabang Port.
   • Reimbursed at 1,000 THB per TEU, for 3 months (January–March 2021).
   • Total budget: 384 million THB.
   • Combined budget (Bangkok + Laem Chabang): 389.28 million THB.

Since Thailand itself is facing container shortages and soaring freight rates (which have doubled since 2020), authorities must assess the economic feasibility and benefits for small exporters. The Port Authority of Thailand has submitted these proposals to the Ministry of Transport for further approval, aligning with government policy to resolve the container shortage crisis.