Shortage of empty containers due to Covid-19 and trade surplus

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

High demand from export surplus

The finalmonths of the year are the peak season for exports and are also the time when shipping lines lack empty containers to deliver goods to exporters for packing as well as owners who cannot register cargo ships.

Recently, survey results of Vietnam Logistics Business Association (VLA) showed difficulties for businesses in shortage of empty containers in each link in their operations with shipping lines. Through surveys, up to 40% of enterprises said they had difficultiesin delivering and receiving empty containers at container gathering places when the owner came to receive anew notification that it did not exist. 43% said it was due to the reservation department with shipping lines that rented empty containers in excess of allowed quantity and 17% because the sales department did not have access to hire empty containers from shipping lines. The problem of empty container shortage occurs onall shipping routes, ofwhich the US route accounts for the majority.

To add to the cause of the above situation, according to VLA, part of the reason is Vietnam is a surplus country. In the third quarter of the past, export turnover increased by 11% compared to the same year in 2019. In addition, due to the weather, the transportation of empty containers back from the US, Japan andChina met many difficulties. Not only due to the impact of container delivery in depot but also the inadequate control of empty containers by depot shipping lines has caused a shortage of containers in Vietnam.

Le Kim Cuong, Deputy Director of Tan Cang Logistics Service Center (SNPL), said the main cause of the shortage of empty containers was the outbreak of the Covid-19 pandemic, especially the peak period in May and September. In addition, due to the effects of storms and fog, the export of goods to China, Japan, and Korea had to stagnant.

According to Cuong, the empty receiving capacity of deep-water ports moving to ICD ports is still limited, specifically in HCM City, Dong Nai, Binh Duong, there are currently about 50 empty depots but only about 20%. Among them, the ICD is capable of directly receiving empties from deep water ports.

Reuse empty container

To solve thesedifficulties, SNPL has had timely and specific solutions in the past time. Tan Cang has focused on investing in infrastructure andimproving resources to enhance the quality of container shipping services and shorten container turnaround time. In the past year, SNPL successfully implemented the renewal process of ICD Long Binh port, from October 2019 until now, SNPL has transshipped more than 3,000 import-export containers via ICD Long Binh to CaiMep port. SNPL will continue to promote the attraction and empty transportation between CaiMep Port and Tan Cang Long Binh ICD, as well as at other ICDs such as Song Than, Nhon Trach, HiepPhuoc.

Arepresentative of VLA said that to resolve the above situation, it is necessary to increase the authorisation to repair empty containers for depots to effectively meet the quality of empty containers and reduce waiting times. In addition, shipping lines must accurately notify the location of empty containers so forwarders can reduce costs and time to move and move empty containers effectively, avoiding local shortages.

Shippers (especially VIP factory shippers) need to effectively use empty containers to return the depot to other shippers and improve efficiency of empty container management to ensure distribution to shippers, shipping companies standard quality empty containers according to the order.

It is necessary to increase the use of new facilities, in which regions, actively take containers in that area to avoid congestion and shortages when focusing on only one place. At the same time, businesses need to strengthen the mechanism to promote forwarding and reward and penalty mechanism in using containers.

Another solution to solve the shortage of empty containers in recent years is the application of Smartlogs' technology "Optimise use of containers" as one of the solutions that businesses can refer, especially in the context of a strong digital transformation.

According to Duy Hong, Deputy General Director of Smartlog Supply Chain Solution Joint Stock Company, to overcome the above difficulties, the company offers some solutions such as the reuse of containers to link importers and exporters in need the container to reuse the container. The empty take-and-drop solution increases container utilisation efficiency with the flexibility of swapping empty receive/lower locations.