A backlog of shipping containers in the Port of Los Angeles (Image: Ted Soqui/Sipa USA)

If your end-of-year celebrations traditionally involve French Champagne, Chinese toys or Korean electronics, look out. Global shipping is trapped in a worsening spiral of delays and capacity shortfalls that could leave consumers hunting desperately for local alternatives to their favoured imported goods.

Welcome to the inaugural instalment of Crikey’s Shipping News, where reports are grim and the forecast is dire. When the Suez Canal was blocked by the container ship Ever Given in March 2021, that was apparently just a foreshock. The full seismic effect of global disruption on the movement of goods around the globe is only now being felt.

To see the simplest version of the story, let’s look at the price of containerised trade. Sending a 40-foot (13-metre) shipping container around the world used to be pretty cheap: about $1910. Now the price is about 7.5 times higher: about $14,160. That’s an enormous increment when you consider that choices about whether to trade overseas can be based on margins of just a few per cent.

A lot of exports are simply not going to hit the high seas at these prices.  And that’s part of the point of high prices. There’s not space for every export to go, some need to be squeezed out.

The capacity issues are real. As the next chart shows, ship delays are endemic now and delays are roughly twice the usual length for this time of year.

Reliability is the lowest on record, according to sea-intelligence.com.

The largest port in North America is Los Angeles. There, an estimated half-million containers are waiting to be unloaded and ships are waiting an estimated 10 days to get to dock. 

Port of Los Angeles CEO Gene Seroka blamed record factory production in Asia and booming buying power in America. 

“It’s like taking 10 lanes of freeway traffic and moving them into five,” he told CNN last week. 

Delays outside ports mean fewer containers are available on shore where they can be filled, contributing to escalating delays. A similar story is found in all the world’s major ports. The world’s biggest container shipping company, Maersk, is now cancelling some services.

“Congestion in Asia and Oceania ports continues to put pressure on vessel schedules, resulting in … missed sailings, which further exacerbates capacity availability,” the Netherlands-based company said in a recent update to clients. 

Outside the box

Companies who would usually use container shipping are hunting for alternatives. Coca-Cola is now shipping some of its raw ingredients in bulk ships, the kind that would usually carry ores and grain. Meanwhile, demand for new container ships is off the hook and far fewer ships are being retired. (That would be bad news for the famous ship breaking industry of India if they weren’t choking on an endless supply of unwanted cruise ships right now!)

In the Port of Melbourne, Australia’s largest port, shipping issues are exacerbated by recent industrial action. The union called off that action this week, but only after the port’s operation was threatened by over 100 wharfies being forced to isolate after exposure to coronavirus. 

It may seem like a miracle anything is arriving by ship at all at the moment, but some things are arriving in large numbers. Australia imported $2.5 billion worth of cars in August alone, a new record number for a single month. Cars don’t arrive by container, they come on dedicated boats called RoRo (Roll-On, Roll-Off). If you’ve ever wondered why a new car has a few kilometres on the clock, this may be why: Each new car is driven onboard the ship by a professional (in this video you can see them driving in, parking together tightly and being driven out of the ship again by minivan.) 

But cars are high-margin. Not everywhere is getting the ships they need. “Our services are omitting some ports in Asia and Oceania to protect vessel calls at key origin and destination ports,” said Maersk. 

In Australia, one shipping line just skipped Fremantle, meaning a lot of agricultural machinery now needs to be transported back across the Nullarbor to get to the WA farmers who need it. Such moves help sea transport to catch up, but only by placing more stress on land transport. And we can’t forget it was a shortage of trucks and truck drivers that led to the ongoing UK petrol shortage.

It seems highly likely more shortages will crop up before Christmas. If there are imported products you can’t live without, best buy them now.