Scarcity of empty containers due to the Covid-19 pandemic and export surplus

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Not only due to the impact of container deliveries in depots but also inadequate control of empty containers by shipping lines has caused a shortage of containers in Vietnam. Photo: T. Binh

High demand from export surplus

The last months of the year are the peak season for exports, but it is also the time when shipping lines lack empty containers for exporters to pack their goods, while shippers cannot register cargo ships.

The survey by the Vietnam Logistics Business Association (VLA) showed businesses’ difficulties in the shortage of empty containers when working with shipping lines. Through the survey, up to 40% of enterprises said that they had difficulties in delivering and receiving empty containers at gathering places. When the goods owners arrived, they were told that empty containers were not available.

Up to 43% said it was due to the reservation department with shipping lines that rented empty containers in excess of the allowed quantity, and 17% because the sales department could not hire empty containers from shipping lines. The problem of an empty container shortage occurred on all shipping routes, especially the US route.

Additionally, according to VLA, the cause of the above situation is the fact that Vietnam is a surplus country. In particular, in the third quarter, export turnover increased by 11% over the same period in 2019. Moreover, due to the weather, the transportation of empty containers back from the US, Japan, and China faced many difficulties. Not only due to the impact of container delivery in depots but also inadequate control of empty containers by depot shipping lines has caused a shortage of containers in Vietnam.

Le Kim Cuong, Deputy Director of Saigon Newport Logistics Center (SNPL), said the main cause of the shortage was the outbreak of the Covid-19 pandemic, especially its peak periods in May and September. In addition, due to the effects of storms and fog, the export of goods to China, Japan, and Korea must be postponed.

According to Cuong, the capacity of receiving empty containers from deep-water ports to ICD ports is limited. Specifically, in Ho Chi Minh City, Dong Nai, and Binh Duong, there are now about 50 empty depots but only about 20% of them can receive empty containers from deep water ports.

Reuse empty containers

To solve current difficulties, SNPL has implemented timely and specific solutions. The Newport has focused on investing in infrastructure, improving resources to enhance the quality of container shipping services, and shortening the container turnaround time.

Last year, SNPL successfully implemented the renewal process of ICD Long Binh port.

SNPL has transshipped more than 3,000 containers of import and export through ICD Long Binh to Cai Mep port October 2019. In the future, SNPL will actively promote the attraction and empty container transportation between Cai Mep Port and Tan Cang Long Binh ICD, as well as at other ICDs such as Song Than, Nhon Trach, and Hiep Phuoc.

A representative of VLA said that to resolve the above situation, it was necessary to authorize the repair of empty containers for depots to effectively meet the quality of empty containers and reduce waiting time. Moreover, shipping lines need to accurately report the location of empty containers so that forwarders can reduce costs and time to move them effectively, avoiding local shortages.

Shippers (especially VIP factory shippers) need to effectively use empty containers, then return them to depots for other shippers to reuse. Furthermore, they need to improve the efficiency of empty container management to ensure that these containers meet the standards of delivery orders when delivering to shippers and transportation companies.

In particular, it is necessary to increase the use of new facilities, actively take containers in the local area to avoid congestion and shortages instead of focusing on only one place. At the same time, businesses need to promote forwarding and strengthen reward and penalty mechanisms in using containers.

Additionally, the application of the "Container Optimization Solutions" of Smartlogs Company is considered one of the solutions for the empty container shortage that businesses can refer to, especially in the context of a strong digital transformation.

According to Duy Hong, Deputy General Director of Smartlog Supply Chain Solutions JSC, to overcome these difficulties, the company has come up with a number of solutions such as reusing containers, linking importers and exporters wishing to use containers to reuse them.

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Additionally, the MT-Move solution increases container utilization efficiency with the flexible relocation of empty containers.